Season 7 Episode 1 Jan 13, 2022

The Pudgy Penguins NFT Debacle, a Dev Intentionally Breaks His Own Open Source Libraries, and Gen Z’s Distaste for Green Text Bubbles

Pitch

It's a wrap for Pudgy Penguins NFTs.

Description

In this episode, we talk about a developer who broke around 19-thousand projects by intentionally corrupting his own open source libraries, and how iMessage won in the smartphone battle for favor amongst Gen Z. Then we speak with Dr. Merav Ozair, Leading Blockchain expert and FinTech Professor at Rutgers Business School, about NFTs and the turbulent removal of the founders of the Pudgy Penguins project.

Hosts

Saron Yitbarek

Disco - Founder

Saron Yitbarek is the founder of Disco, host of the CodeNewbie podcast, and co-host of the base.cs podcast.

Josh Puetz

Forem - Principal Engineer

Josh Puetz is Principal Software Engineer at Forem.

Guests

Dr. Merav Ozair

Leading Blockchain Expert and a FinTech Professor - Rutgers Business School

Dr. Merav Ozair is a leading blockchain expert, a FinTech Professor, and the Editor-in-Chief of the World Scientific Series in FinTech. Her work focuses on decentralized finance (DeFi), non-fungible tokens (NFTs), decentralized autonomous organizations (DAOs) and the Metaverse, across different industries and business use cases. She is a member of the Academic Advisory Board at INATBA (International Association for Trusted Blockchain Applications) and holds a PhD from Stern Business School at NYU.

Show Notes

Audio file size

36779945

Duration

00:38:19

Transcript

[00:00:10] SY: Welcome to DevNews, the news show for developers by developers, where we cover the latest in the world of tech. I’m Saron Yitbarek, Founder of Disco.

 

[00:00:19] JP: And I’m Josh Puetz, Principal Engineer at Forem.

 

[00:00:22] SY: This week, we’re talking about a developer who broke around 19,000 projects by intentionally corrupting his own open source libraries and how iMessage won in the smartphone battle for favor amongst Gen Z.

 

[00:00:35] JP: Then we’ll speak with Dr. Merav Ozair, Leading Blockchain Expert and FinTech Professor at Rutgers Business School about NFTs and the turbulent removal of the founders of the Pudgy Penguins Project.

 

[00:00:46] MO: And they feel now that they were maybe ripped off in a sense because of all the hype, the developers, now they’re still getting kickback of royalties.

 

[00:00:59] SY: So we’re starting this episode off with a wild story about how a developer intentionally corrupted his own open source libraries on GitHub and broke around 19,000 projects as a huge FU to Big Tech. In a story reported by Bleeping Computer, the developer named Marak Squires purposefully introduced an update called “New American Flag Module” to his colors.js library, and a 6.6.6 update to his faker.js NPM libraries, which created an infinite loop that caused any application using the libraries to spit out the words “LIBERTY”, in all caps, and a bunch of gibberish. So the libraries collectively received over 22.8 million weekly downloads on NPM. The reason behind the self-sabotage is reportedly the developer’s disdain for not getting paid for his work on his open source projects. And in a November, 2020 post on GitHub, Squires wrote, “Respectfully, I am no longer going to support Fortune 500s and other smaller-sized companies with my free work. There isn’t much else to say. Take this as an opportunity to send me a six-figure yearly contract or fork the project and have someone else work on it.” In response to his commits, which bricked the users of his software, GitHub suspended Squires’ account. We’ll put a link to the Bleeping Computer piece in our show notes. So what are you thinking about all that, Josh?

 

[00:02:31] JP: I mean, wow!

 

[00:02:33] SY: That is juicy.

 

[00:02:34] JP: I mean, there’s so much here. Okay. So like this has been an ongoing conversation that we’ve covered a couple of times here on DevNews about how open source authors are more often than not working for free contributing, donating their time, donating their code and effort, and large corporations are profiting from it and not giving a lot back. And I definitely can see the frustration with that, especially if you’re a developer that is trying really hard to make ends meet. On the other hand, I don’t think we’ve ever seen a developer protest, I’ll say, in this way. This is pretty bad. There are a lot of different ways that this could have gone differently. I think it’s easy to backseat quarterback after the fact. But ultimately, the author of these libraries controls the license. And if they wanted to change the licensing, take the projects down, that’s up to them. That’s their option. I think where they really get in trouble is when they change the source and like almost sabotage their source code midstream. And I think that’s why we saw GitHub step in. I wonder what you think about GitHub stepping in. That part is crazy to me. GitHub has locked the author out of their account and rolled these libraries back so that the damaging code isn’t being distributed anymore. That seems really legally troublesome.

 

[00:03:59] SY: That to me is the wildest part because to me, I mean, I’m thinking like what could he have done differently? Right? I guess he could have maybe emailed his top people who use his project and say very nicely, “Hey, working really hard, would love to get some support for this project. You work for a big company, here’s a link to the sponsor button. Here’s a link to the Patreon page.” Whatever it is, like, “Here’s a way that you can buy something and support me financially.” I’m sure it would have been ignored, frankly. I’m pretty sure everyone would be like, “Well, why would I do that? I don’t need to support you. I’m getting it for free. Why would I do that?” So I don’t think that really would have worked. So I guess the only other thing you could have done is just been like, “If you don’t support this, then I’m just going to take it down entirely.” But to me, it is just really weird that GitHub got involved at all because ultimately, I don’t know the legality around different licenses and what you owe and that kind of thing, but I would just guess on principle that it’s his freaking code. It’s his library. I would think that he could do whatever he wanted to do with it. He has no contractual obligation to keep working for free or supplying his skills and expertise to these companies to use as they want to. I don’t think the license includes that. So I’m very surprised that GitHub felt like they had to protect the users of that code from him.

 

[00:05:23] JP: There have been instances with other libraries. I remember I think it was the left-pad library a couple of years ago. I’m going to get the story wrong, but I think the author basically took it down, got rid of it, and it broke a whole bunch of dependencies upstream and JavaScript Land. And other developers rapidly swooped in to reimplement it or take the copies that they had and fork them. It was another open source project with very open licensing terms. And that could have happened as well. I think the real wrinkle here is that this author did not just take down their library. They changed it significantly so that it is trolling people that are using it. And I think that’s his decision to make. I wouldn’t make that decision, but that’s his choice.

 

[00:06:09] SY: It feels like his decision to make. Yeah. And that’s what makes me wonder, like, “Does GitHub have governance rules that I’m just not aware of? Is there some type of in the fine print? Is there something that prohibits you from using or posting code that does certain things?” It makes me wonder, “Is there more to what we put on GitHub that dictates how we’re supposed to use our code or supplier code that maybe we’re not aware of on a day-to-day basis?” It makes me a little suspicious, kind of like what are we agreeing to by putting our stuff on GitHub if GitHub can do something like this where they can lock you out of your own code.

 

[00:06:47] JP: I mean, if you think about it, I guess from a legal perspective, if this code has a very liberal open source license, which it does, then if you're GitHub, you could argue, “Hey, we’ve just decided to fork it.” They didn’t actually fork it. They still have this person’s name on it. They locked him out of his account, but his name is still on it. It’s bonkers to be. That’s the part that really, really confuses me that GitHub has basically hijacked his code. And I understand why, it’s to make sure all these other downstream libraries and projects and clients still work. I totally get that. But on the other hand, there have been disruptions like this in the past and the community has banded together and worked around it. And I don’t know what it is about this particular situation that GitHub feels like they need to stop in and say, “Well, now you don’t know what you’re doing. We’re going to roll your code back to the last known version and keep it there.” It’s crazy.

 

[00:07:43] SY: Yeah. So I guess for me if it’s, “I’m a huge Fortune 500 company and I needed this to make money and now I can’t make money anymore,” to me that feels like, “Why is GitHub involved?” I guess the only situation is maybe if there’s some type of life or death app out there, like if it’s running at hospitals or in emergency rooms or something where it actually needs to work, otherwise people’s lives are in danger. That’s the only situation where maybe I’m like, “Okay, maybe there’s like an ethical dilemma there where GitHub needs to be involved, but it still feels like such a reach for the platform to protect users from other users. It still feels like an intervention to me. I don’t know. It feels weird.

 

[00:08:25] JP: Yeah. Also like ethical quandaries in GitHub, like, how long has the criticism been around that they’re doing business with the US Immigration and Customs Enforcement Department. I think that’s an ethical quandary that counts the other way. Yeah. I mean, I could construct a situation in which a hospital desperately needs a JavaScript license, but I mean I’m sure our listeners are all screaming right now through their headphones, like, “Why didn’t they lock their versions of their code?” If I’m on a ventilator, I hope that the ventilator is not doing like NPM updates hourly. Right?

 

[00:09:02] SY: That’s true. That’s a good point.

 

[00:09:04] JP: Can you imagine? How many times are you going to blow away your modules, like a folder? Oh my God! I hope that’s not controlling someone’s life.

 

[00:09:09] SY: Yeah. That’s a good point.

 

[00:09:11] JP: But I see your point. There could be like ethical considerations. But again, it’s open source software. It could be copied and forked and GitHub purchased NPM a couple of years ago. So GitHub controls NPM. They could go into the registry and changes in there. I mean, they’ve got other options.

 

[00:09:28] SY: Yeah, more than likely, it feels like they got a couple angry emails from maybe some of their top clients who’s like, “What the hell is going on? You need to fix this,” and they stepped in. That’s my guess anyway.

 

[00:09:38] JP: Or even their own code. If you want free, GitHub.

 

[00:09:40] SY: Oh no, maybe they need it for their own code. Yeah.

 

[MUSIC BREAK]

 

[00:10:03] JP: So the next one we want to talk about is how it’s not easy being green. There was an interesting piece in the Wall Street Journal that goes into depth about how in the battle between iPhone and Android, Apple’s iMessage is by far most favored among Gen Z users. The piece opens with a story about how a 19-year-old that switched to Android was called out in a group chat by her friends who all use iPhones. With one friend writing in their group chat, “Who’s green? Out!” This of course refers to how iMessage text pop-up as a blue bubble and SMS or Android users in iMessage pop-up as green bubbles. The story goes on to talk about Gen Z’s general negative feelings of seeing that someone is an Android user. For example, and I had never considered this, in dating situations.

 

[00:10:48] SY: Oh my God!

 

[00:10:48] JP: Right? One Gen Z user is literally quoted saying, “Ew, that’s gross,” when seeing a potential date’s text show up is green. I had never considered this. We’ve also talked about similar phenomena many times and our producer, Levi, who is not a fan of the green bubbles, but to him, it’s not just an aesthetic aversion. He associates it with the trouble iPhones and Android phones have texting one another, which can cause miss texts. His solution and the solution I’ve heard of others proposed is to ask if a person is comfortable messaging on another platform like Instagram or Signal or WhatsApp. The general negative feelings that Gen Z shares about iPhone versus Android messaging can be seen in the data. According to Consumer Intelligence Research Partners, “iPhone sales among people aged 18 to 24 have skyrocketed.” Saron, how do you feel about your green bubble friends?

 

[00:11:39] SY: So I also was very, very judgmental of people with green bubbles. I was very judgmental for a long time. I was like, “Oh my God! Here comes the not one of us.” I definitely felt some type of way. I don’t know if I’ve actually vocalized it to someone, but in my head I’ve definitely been like, “Oh my God! This loser.” So I understand the feeling. Since then, my husband has become a green bubble user.

 

[00:12:04] JP: Oh, you’re a mixed household now.

 

[00:12:06] SY: We’re a mixed household now. So he’s Android. I’m still on iPhone. And we’ll see, I’m considering switching to his phone because his phone’s camera is insanely good. But for now, I’m iPhone, he is Android, but really what that’s done is exactly what you mentioned when you were talking about what Levi does. We just switched to using Signal entirely, which we liked better than iMessage anyway because it’s secure end to end, et cetera, et cetera. I believe it’s open source. It’s a nonprofit. It’s kind of an organization that we’re proud to use and support anyway. So it kind of worked out and I was really nervous at first when he switched because I was thinking, “Oh, man, what are you going to do? You’re not going to be able to convince your friends and family to switch over to Signal. People don’t switch apps.” But he did. He’s successfully moved like all of the people in his world, all of his friends, all of his family, his ex-coworkers that he talks to on a regular basis. He basically sells like, “Hey, if you don’t mind, I used to switch to Android and I get like way more functionality and I can do video calls and emojis and all this stuff by using Signal. Do you mind switching over?” And everyone’s like, “Yeah, sure, no problem.” So we’ve just become like a Signal, and because of that, like now I use Signal for most of my phone conversations and we’re basically a Signal household.

 

[00:13:27] JP: That is really interesting. I am very impressed you’re able to move anyone over a messaging platform because I’ve tried that a couple of times in the past with my friends and family, and it’s been a face full of ignore. Everyone was pretty much like, “Nope, not going to do that. I don’t know what you’re talking about.” And there’s network effects, too. Right? People just get comfortable with whatever particular platform they’re in. And I have also been a little judgmental towards green bubble people. I think the biggest thing for me is internally I know that if I am texting with someone from my iPhone and I see a green bubble, there’s some features in iMessage I can’t use.

 

[00:14:04] SY: Yes. Yes.

 

[00:14:05] JP: And that’s really it. That’s all I seem to notice or really care about. Other than that, it doesn’t really matter to me too much. I mean, I will think like, “Oh, this person has an Android phone.” But that’s really it. I won’t be like, “Oh, yuck, gross. I don’t want to text with them.” Then again, if it was a family member, I will say like most of our family is on Apple products. So if it was a family member, I might be like, “I’m not going to be able to help you with your phone.”

 

[00:14:34] SY: Which you’re probably fine with.

 

[00:14:35] JP: Yeah. But I don’t really notice too much of an issue. It never occurred to me that this could be an issue with dating.

 

[00:14:43] SY: That’s really funny. That’s really bad.

 

[00:14:46] JP: That’s really bad. And I think it speaks to like these really kind of subconscious class distinctions that Android and iPhone have.

 

[00:14:54] SY: Yeah.

 

[00:14:55] JP: I think it’s getting better, but there’s still definitely a perception in the United States that the iPhone is the luxury cell phone brand and the Android is not. And I wonder how much of that bleeds into this.

 

[00:15:11] SY: Yeah. There’s definitely like a status component, which is actually kind of doesn’t really make sense because like the Android phones can get pretty expensive too. I mean, those are also thousand dollar phones. They’re not cheap.

 

[00:15:22] JP: Oh, those new folding Samsung phones, they are gorgeous.

 

[00:15:26] SY: Yeah, exactly. But in our minds, I think we’ve just always equated iPhone to being cool and the latest and like a little luxurious and kind of up there. And Android, we don’t see as favorably. And I think that’s maintained even though it’s not actually reflective of the models and the prices, not actually true anymore, but we still kind of have held onto that.

 

[00:15:47] JP: I really wish alternate messaging services were more popular here in the United States. Our European listeners are probably just shaking their heads right now. All my European friends use WhatsApp. It’s not even a question. If you’re texting someone, it’s WhatsApp. No one blinks twice. And I wish that was more common here just for the interoperability and the ability to be on any kind of platform you want and still keep your messaging. I’ll admit, the fact that my contacts are in the Apple universe and I have interoperability between my devices, that keeps me in the Apple ecosystem. Not exclusively, but it’s a big part of it. And I wish I had the mobility. Some of the new, like I mentioned, folding phones from Samsung, I think they’re crazy interesting. I would love to switch to one. But I’m in that walled garden. I’m in too deep. I just don’t feel like I can switch.

 

[00:16:43] SY: Yeah. That was one of the things that I was wondering about with my husband, Rob, of how annoying was it to switch over. It definitely took a little while to kind of migrate everything and get comfortable with the new apps and get things situated. But I asked him these days. I’m like, “How do you feel?” Now it’s been I think a couple months since he’s used it. And he’s like, “No, I'm not looking back. Everything’s fine. I got myself situated. Got my apps, got my Signal.” And he’s all good to go. So it’s definitely a bit of potentially a learning curve, definitely a switch and adjustment. But I think once you get there, you’ll be fine, if you want to. You got choices.

 

[00:17:16] JP: Yeah. You have choices. Just as a data point, my daughter, who is 14, I know, I’m telling you a kid’s story on the podcast. My daughter, who’s 14, I asked her once, “What messaging platforms do you use?” Because we wanted to set her up with some accounts on a new phone. And her answer was basically, “Yes.” She uses a different messaging platform for each friend. She has one friend.

 

[00:17:34] SY: Really?

 

[00:17:35] JP: Yeah. She has one friend on Google Duo. She has another friend on WhatsApp.

 

[00:17:40] SY: Google Duo?

 

[00:17:41] JP: Oh, yeah. I know. She has like one friend on like each of four different services. It’s bonkers. And to her, she’s like, “That’s just the way it is. When I want to talk to X, I launch this app. When I want to talk to Y, I launch this app.” Super fragmented.

 

[00:17:56] SY: That sounds annoying. Like anytime I get, because I didn’t really start using WhatsApp until when I went to a business school, like everyone used WhatsApp there, so I ended up getting it, and that’s the only time I really opened the app is if I get something from someone, from one of my peers from school, but every time I do, I get annoyed. I’m like, “Oh, I got to open up this app again. Gosh! It’s the worst!” It’s irritating.

 

[00:18:21] JP: What do you think would take for Apple to be more interoperable? I mean, you could argue right now that iPhones are interoperable with SMS, which is kind of like, “Here’s a video phone and here’s a Telegram.” It really is the lowest common denominator.

 

[00:18:38] SY: That’s true.

 

[00:18:39] JP: What do you think it will take for Apple to maybe embrace interoperability in messaging standards a little more?

 

[00:18:46] SY: I just don’t feel like they have a reason to why they’ve never been interoperable priority. You know what I mean? That’s just never been one of their things. They are Apple. They do Apple things and they do it in their way with their philosophy and everyone comes to them, but they’re not the ones that go to other people and try to make friends. You come sit with them. I don’t think it’ll ever be a priority. I don’t see why it would be. They’re doing great. They’re the largest company in the world doing just fine. They have no reason to make it easier for you to hang out with your Android friends.

 

[00:19:19] JP: That’s a good point.

 

[00:19:20] SY: So I just don’t see it happening.

 

[00:19:21] JP: Yeah. Until they start losing some sales over it, I don’t think it’s going to happen either. They really have a really good point. They’re like the highest valued company in the world.

 

[00:19:28] SY: Yeah.

 

[00:19:30] JP: No, I don’t think anybody in HQ is thinking like, “Hey, we really should rethink the strategy.”

 

[00:19:33] SY: Yeah, exactly. Coming up next, we talk about NFTs and the removal of the popular Pudgy Penguins NFT Project founders, which has been called, “One of the most tumultuous 24 hours in the short history of NFT communities,” after this.

 

[MUSIC BREAK]

 

[00:20:11] SY: Here with us is Dr. Merav Ozair, Leading Blockchain Expert and FinTech Professor at Rutgers Business School. Thank you so much for joining us.

 

[00:20:18] MO: My pleasure.

 

[00:20:19] SY: So before we get into the Pudgy Penguins NFT story, I want to lay the foundation a little bit and just talk about what NFTs are in general.

 

[00:20:29] MO: So I guess when we’re talking about tangible, this is not non-tangible. This is the concept that has been forever, right? So non-tangible is something that has to be unique and it has to be one of a kind. And you can think about a painting. You can think about the real estate. You can think about a system audio. Right? The other thing unique is something that is what we call non-fungible because it has a very unique value and now the market determines what that market value is and it may fluctuate. So my technical perspective when we’re talking about token, right? So a token is something that has been tokenized. So it is a token, but unlike let’s say Bitcoin, it’s something that is one of a kind. So it’s not like you have all Bitcoins are the same. It doesn’t matter which one I use. Here, each and every token is unique and it has its own value. The way I like to think about NFT is a thing that they power them, there are two powers. One power is authentication. For every transaction to happen in our world, physical or digital, you have to authenticate. You have to authenticate the person. You have to authenticate the asset because without authentication, nothing’s going to happen because I don’t know if this is the real thing. So the NFTs I think, the highest power is the authentication part and that basically facilitate all transaction and will facilitate, in fact, in my mind also transaction in the physical one, not just in the digital form. The other power of NFTs is the community aspect of it, right? You can create communities and you can create reward system, loyalty system, and it indicates for me that whatever I always been kind of advocating for that we should create communities and the power of digital currency in general since the beginning of Bitcoin was about communities.

 

[00:22:33] JP: Is the NFT a new concept or is it just this technological implementation of it that’s new? The other thing I’m curious about is what do you think the appeal is of NFTs? Why have they captured the public and the cryptocurrency communities’ imagination so much?

 

[00:22:49] MO: Well, first of all, I know that the hype of NFTs started maybe two years ago or something like that. But the first NFT you probably all know was created in November of 2017 by Dapper Labs. They are the ones who are now partners with the NBA for NBA Top Shot. So that was the first prosperous one. And of course you know about CryptoKitties. So CryptoKitties was first created back in November of 2017 of NFTs and it was a game. The idea of CryptoKitties, you can breed them, it’s unique. Every animal is unique as you breed them. You play with them and then you sell them, do whatever you want of them. And that was way back then. We all know that the crypto market suffered. There was a bubble and it crashed and everyone forgot about it, but NFTs are what unique tokenization is. And I think, I mean, I always joke about it that probably with the pandemic, we have so much time on our hands and we kind of rediscovered the cost of affinities and suddenly it came back to the forefront in 2021, suddenly everyone’s talking about NFTs, as if it’s some kind of a new concept, but it’s not.

 

[00:24:13] SY: Have you been surprised by just how much it’s taken off, how popular it’s become with not necessarily businesses, but just regular people, people who read about this, who become millionaires or who read the headlines and try to get in on the game? Has the excitement and kind of the fever around NFTs, has that surprised you at all?

 

[00:24:34] MO: It hasn’t surprised me because I also teach at the university so I can see that with my students, especially the young generation, right? The 20 something, the Gen Z, as we call them. And they are very excited about it. They’re excited about new things and innovation. So they got very quickly into that. So that doesn’t surprise me because it’s exciting. It does have potential beyond what we can think, but it’s okay. People are now more focused on the hype because everything starts with a hype because think about it, even the internet. It started with the hype, right? The bubble, right? Everyone wanted to get in. Everyone had an idea. But eventually it settled with the real use-cases, the real implementation of what internet is and is not with the real applications. Right? So we’ll get there. And I’m happy about it, at least their interests, and because of that interest, you can see brands like Dolce & Gabbana getting into that, Gucci getting into that, Burberry, Nike, Adidas. So serious businesses are now thinking about the business use cases. So it’s good that we have that hype because that’s what will lead us to what they called the real thing, the economic implementation, which is good.

 

[00:26:00] SY: What do you think is the real thing? When you imagine, like you said, the internet had its hype moment, then it kind of passed, the bubble burst. Now the internet is here to stay. What’s the NFT version of that story?

 

[00:26:12] MO: I mean, you can think about it, you know, you can authenticate everything, authenticate real estate, you can authenticate even your degree. Right? You can authenticate any certificate. The word I in fact think about it and think with me, right? Eventually, it will be what I call a secured digital identity. You’ll have a wallet, right? And each and every piece of information will be an NFT. Whether it’s your merit certificate, your degree, your professional certificates, your deed, anything about you that you now have in your profile, so to speak, will have this secured identity, which everything will be in one token that will have all this information and you can decide what to share and what not to share. And that of course will have everything it has to do with privacy and security theft, something that’s on the mind of a lot of people. Of course, when we get into the metaverse, that’s a big issue. And I think that when it comes to that, NFTs, when we moved to the metaverse, then it’s not a matter of if, it’s a meta when, that evolution, everything whether it’s the avatar, whether it’s the asset, every detail asset will have to be NFT to allow for transactions to have and authenticate everything.

 

[00:27:40] JP: So right now it seems like NFTs are very tied to investment and speculation. And I think that’s led to some criticism of people feeling like they might be a scam. They might be a bad investment. What can you say about how we move to a future where NFTs…? You described NFT is being associated with professional degrees and licensure and that sounds awesome to me. But right now, NFTs I think in a lot of people’s minds are associated with…

 

[00:28:14] SY: Like monkey GIFs. I think it’s like a real thing…

 

[00:28:17] JP: Pudgy Penguins. Right? Like avatars and digital art. Do you think that’s a natural process of the adoption of NFTs at large? I just wonder if you could kind of like talk about how we get from here to there.

 

[00:28:31] MO: First of all, I mean, avatar is not a game. I mean, now we think about them as a gaming perspective, but avatars eventually, I mean, if the metaverse will become what it’s supposed to be, right, that is going to emulate our physical world and beyond, then our avatar, we can do everything, right? If you think about the metaverse as a place for work, like the way Microsoft has been thinking about it, then that’s definitely a business use case. Now I guess that all this going to be some hyping is, I don’t know, art pieces, digital art pieces, and those because if you think about it, I will equate this to what we have now in our physical traditional world, which is collectibles, right? It’s not that the cute stuff, the digital art, the collectibles will go away completely. It will be there, but it’s not going to be the only way, the only thing that people will talk about and the only applications. It will be one of, one of many.

 

[00:29:41] SY: So let’s get into the Pudgy Penguins story, which has been called one of the most tumultuous 24 hours in the short history of NFT communities. So let’s start by maybe introducing what the Pudgy Penguins Project even is. Can you talk a little bit about that and its community?

 

[00:30:01] MO: Well, I mean, from what I understand, I mean, it seems to me like very similar to, let’s say the CryptoPunk. So you have like a full collection and everyone else can see whether the thing is apes or the thing is CryptoPunk or the thing is in that case penguins. And I guess what’s interesting about this part of this community unlike let’s say the CryptoPunk is that here you also have an asset of a community. And this is something that a lot of people are talking about when it comes to NFTs that you can use NFTs to create a community. And I think it’s kind of like happened organically in a way, like a group whether it’s Discord or other places where they start like a club. And it’s interesting because this is in fact as I said at the beginning, that was the premise of cryptocurrency to begin with or blockchain technology to begin with when Bitcoin was created, to create the type of community that we decide what’s good for us. It’s interesting of what happened here. So it started probably just as a collection like the CryptoPunk maybe, but it became more than just that because of the community that was created around it.

 

[00:31:32] JP: So at first, the Pudgy Penguin Project seemed to be really booming. It was extremely popular. It’s sold out all of the NFTs that they had created for sale I think in like 20 minutes. How did they get from there to their founders being removed?

 

[00:31:49] MO: Well, I guess it’s because the founders didn’t hold to the promises. When a project starts, there is a roadmap. Okay. So let’s say within six months, we’re going to give you X. And they probably didn’t just buy it for the piece of coin, but they bought it for all the other perks that the developers have enticed them to say, “Okay, we’re going to provide you X, Y, Z in six months or a year or whatever.” Right? And they feel now that they were maybe ripped off in a sense because of all the hype, the developers, now they’re still getting a kickback of royalties.

 

[00:32:29] SY: I mean, it kind of reminds me of a Kickstarter project where you have all these promises up front, all these rewards that are going to be coming. You put your money in and you tell your friends, you get excited. And then when it’s time to deliver, you just don’t deliver. It kind of reminds me of that. Is that the way you think about it?

 

[00:32:44] MO: Yeah and they’re very similar to that, but unlike with the Kickstarter, you may go and say, “Okay, I want my money back.” Right?

 

[00:32:50] SY: Right. Right.

 

[00:32:51] JP: You can’t do that with NFT.

 

[00:32:52] MO: You can’t do that with NFTs, exactly. But it’s nice that the community can decide to kick them out in a way.

 

[00:33:01] JP: So now people are trying to move this huge community of Pudgy Penguin NFT owners to a parallel community called Wrapped Penguins that will also have a decentralized autonomous organization governance model. Can you talk about what wrapping is technologically and why people think this might save the Pudgy Penguins’ community?

 

[00:33:21] MO: The reason why they did that is basically to not allow the developers to get the kickback of the royalty. When you wrap NFTs, that smart contract is wrapped, right? And if you just use the wrapped ones, then you can’t really access the unwrap. Right? It’s like a candy. You can’t eat the candy if you did not unwrap it. So if you just use the wrap, so you can still trade the wrapped ones, right? And maybe create like a smart contract on top of the wrap with new royalty mechanism that it will not unveil what’s happening, which is the unwrap. But they say you can always unwrap it, but everything on the blockchain is immutable. Right? You can’t just amend smartphones. You can’t amend a token. It is what it is. In order to make any changes, you need to add a fork, right? When you look in YouTube, that’s what they’re trying to do now with the wrapping, which is a way to create something else.

 

[00:34:36] JP: Interesting.

 

[00:34:37] MO: And deviate from what it was, it’s like when you fork, so to speak.

 

[00:34:43] JP: Let’s spend a little time talking about decentralized autonomous organizations or DAOs. What does this governance model look like? And do you think it’s a more sustainable model that can mitigate issues that might come up like they did with the Pudgy Penguins community?

 

[00:34:58] MO: It’s like a coop, like a cooperative organization that is self-governed with the members decide that the community, they have rules and they decide about what the rules are, they decide about what the buildings are. And basically, like in a coop, you know exactly who’s coding and what. It’s hard to keep anonymity in the real world, but the way that I would like to think about a DAO is like a faceless governance, which can really help us, in a sense, diminish all the biases that we have in society because I don’t have to know who you are exactly. I only know that you are the wallet number, whatever, and I don’t know who you are. I don’t know your name. I don’t know your face. I don’t know your gender. I don’t know anything about you. Right? And that’s a good thing because I can feel more comfortable when I’m voting, deciding to vote real without any fear, something that we don’t have in our real world, so to speak. And I think that if we had a doubt at the beginning, most of the problems that we’ve seen with the story probably would have been diminished if not eliminated because the community should decide what’s good for them. It has to be on the forefront of any development of any type of project before the fact and not after the fact.

 

[00:36:37] SY: Well, thank you so much Dr. Ozair for being here with us.

 

[00:36:40] MO: My pleasure.

 

[00:36:51] SY: Thank you for listening to DevNews. This show is produced and mixed by Levi Sharpe. Editorial oversight is provided by Peter Frank, Ben Halpern, and Jess Lee. Our theme music is by Dan Powell. If you have any questions or comments, dial into our Google Voice at +1 (929) 500-1513 or email us at [email protected] Please rate and subscribe to this show wherever you get your podcasts.