Why Decentralized Data will Drive Innovation in Web3 with 3Box Labs' Lauren Feld
Jessica Galang: Hi, everyone and welcome to the Impact Podcast. I'm Jessica Galang, the content editor here at Georgian. Today, I'm sitting with Lauren Feld, head of visit development at 3Box Labs. 3Box is the company behind Ceramic, a decentralized data network that allows developers to build apps with Web3 data. They're also the company behind the IDX protocol, which allows users to have a unified digital identity consisting of all of their data, replacing our ideas behind identity siloed across different accounts. Ceramic especially has been getting a lot of buzz lately for their work enabling data composability, which allows anyone to build new ideas and applications using existing data in Web3, like how we have open source data today. I know that's a lot to unpack, but I'll let Lauren get more into the problem Ceramic is trying to solve and how we can understand digital identity in this new world. Lauren, thanks so much for joining us today.
Lauren Feld: Yeah. Thank you so much for having me. I'm excited to be here and to chat with you.
Jessica Galang: Awesome. Let's just jump right into it. Can you let me know, what is different about building Web3 applications or dapps from a data perspective compared to what we're doing now, which is known as Web2?
Lauren Feld: Yeah, I think the biggest difference building Web3 applications versus Web2 is that, from the ground up, you're building data that is open and accessible and available to all, theoretically, versus in a Web2 application today, you see companies basically building with these centralized servers. They have a database wherever, maybe it's an Amazon database, maybe it's from another company, but it's something that their team internally is controlling and they're managing all of the data that lives within it. It's really creating these closed- walled gardens that only that specific company or other ones that it allows can actually access, and oftentimes obviously we have to trust as the user that they're securing our information and doing the things with it that they tell us that they are, which we often know is not always the case. With Web3 applications, instead of saying," Hey, trust this third party to basically care your information about yourself," and to manage that, to basically put this all on an open database where you can actually own and control it, then you don't have to put your trust into a third party. Instead, putting all that information with the user who then is able to basically grant permission or access to applications to view their data instead of the other way around where an application actually has my data and I have to fight or try to navigate around something super cumbersome just to access my own information.
Jessica Galang: The idea is moving away from the centralization and getting users back in control of their own data?
Lauren Feld: Yep, exactly. I think the idea is that a lot of users talk about wanting to have that data sovereignty and being able to own and monetize their own and building this kind of open data protocol like what we're working on at Ceramic, is really the core technical unlock that will enable a lot of these new use cases that people are trying and hoping to build in Web3.
Jessica Galang: Okay. What are some of these use cases?
Lauren Feld: Yeah. There's so many different ones. I would say one of the main things is just starting to think about things like user profiles. Right? Super simple, but I want to create a view of myself in the decentralized web. If you think about things like ENS, for example, they're probably one of the more well- known projects in the space where people are doing that, and I can go and start to show maybe all of my NFTs that I own, different collections that I want to curate and show to other followers or people that I've know in the space. Profiles is the V one, and then I think from there, people are starting to build up reputation. How can I start to store different credentials that attest to different activity that I've done in Web3? Maybe it's some sort of credit score that I want to build for a new lending protocol that I want access to, and they want to show basically proof of my credit worthiness. Or maybe it's more of just a social attestation, something that shows that I've been active in different Dow communities as I go to onboard and apply to new communities that I want to participate in, they probably want to see, well, how good of a citizen are you, and like these other Dow and crypto communities. Starting to issue credentials that live with the user that I can decide who and when and if I show them to others, I think is really interesting. Then also just really any other data that you can think about that doesn't need to live on chain. For example, NFTs have been a huge space, and over the last year, everyone's really excited about them, everyone's minting them, it feels like. Some of that in NFT itself has to be burned and live on chain, but there's a lot of metadata that could live around that NFT that doesn't need to live on chain. For example, every time an NFT changes hands, maybe we want to update and sign an address book of why I purchase that or why I think that it's so interesting and unique. That obviously doesn't need to be stored on chains, so any kind of NFT metadata could be stored on Ceramic. There's a whole bunch of use cases, but really any kind of data that you think about, and specifically non- financial data, is a great use case, I think, for an open decentralized data layer like Ceramic.
Jessica Galang: Okay. There's a lot to unpack here and I want to talk about these ideas around identity that you're talking about. I think this is a good transition to talk about the work that you do with IDX. Just as some background for our listeners, the IDX protocol allows users to have a unified digital identity consisting of all their data, which replaces our ideas around identity now. We're all used to logging into Facebook and Twitter separately and then owning our data. Even for me learning about this initially, it's mind blowing to think about having all of our data and being able to control it. I'm curious, what's the thinking behind an application like that, where all our data's decentralized and why is this so important for building this foundation of Web3?
Lauren Feld: A lot of people that are maybe less technical don't fully understand all the workings of user data management in the Web2 space. But if you think about it at a high level, you have these central servers and you can think about companies or storing user data in a database, and it's pretty clean, right? It's easy to manage and query and find different user data if I'm storing in this well organized table that I actively maintain. But if we think about doing decentralized data where all of your data is out in this open permissionless web, it's a lot harder to make sense of it, right? To figure out how do I actually find meaningful patterns or get information I need to access when I do. Really what IDX is doing is creating an easy way for developers to start to store user data directly with users. IDX stands for identity protocol, and it's basically a protocol that maps data to a decentralized identifier, which is like this higher level identifier string, where you can actually tie multiple different accounts or wallets to a single DID. As an user, I can start to see my data from across different chains and ecosystems, and IDX just gives developers a very easy way to start to map it into what we call a key value store, but you can just think of that as something like a spreadsheet. You have these rows of DIDs and then each of the cells and columns to the right, you have different data that I'm storing like my name or my phone number, whatever it is that I want to be storing.
Jessica Galang: Okay. Moving back to Ceramic, where do you live in the ecosystem of building Web3? Is there a way that this plays out in real life as we're transitioning from this Web2 world of us working with centralized companies and siloed data into Web3?
Lauren Feld: I think where we see ourselves playing as very much a core part of the Web3 stack, so you think about all these people who have ambitions of building decentralized applications, but in order to do that, you need to store all of your data also in a decentralized way. What some users don't realize is a lot of the decentralized applications are still storing a lot of off chain data in AWS S3 bucket, some sort of Web2 database that's centrally controlled, which is very much against the whole ethos of the space. But I don't think a lot of people even realize that, and a lot of people, frankly, don't care. But for people who are really ambitious about building and being early adopters and building fully decentralized applications, you need to decentralize all the way down to the core layer, which really centers around data. We see ourselves as being very much like middleware within this Web3 stack, but being core data infrastructure for any application that needs to build a fully decentralized app. In terms of how does this come to fruition, we have some great projects. I think RabbitHole is awesome. It's a great platform that's basically focused on onboarding Web2 users to Web3, and they basically have these quests where you can go on and participate in some sort of core protocol or ecosystem in the Web3 space and get rewarded in their native tokens, or go down a learning pathway to understand new Web3 specific skillset like treasury management or something. And so what RabbitHole is doing is they're starting to create those user profiles and actually store them on Ceramic, which is really interesting because most companies, like we mentioned, will just store that all in their own backend and have it be fully centralized. But they're really pioneering kind of think dog feeding the technology that they're shepherding and helping to bring to fruition, which is super cool, and then starting to now create these credentials. Every time that I could complete a quest or a certain task on RabbitHole, I'll actually get some sort of attestation that says like Lauren just did this thing with her wallet, or she just completed this tutorial around treasury management, and that's basically a proof that now lives with me as an user. What's really cool is now I own that and I can basically port it with me anywhere that I want to on the internet. You can think about someone now creating some type of LinkedIn system in the Web3 space, where in today's LinkedIn, I can go and I can write whatever I want. Pretty much I can say I worked at NASA, make anything up that I want. But in the Web3 space, I have these cryptographic attestations or proofs of other activity that I've done, and now actually have them automatically populated as a historical and verifiable proof of my either employment or just skills that I've acquired from my different Web3 activities.
Jessica Galang: How do protocols like Ceramic help enable innovation in the Web3 space?
Lauren Feld: I think a lot of people think decentralization as just an ethos and just a vision that they want to see in the world. It's very idealistic. But there are actually very concrete benefits, both technically and from an user perspective. One, just decentralizing data is more secure, right? Instead of having a honey pot of a bunch of information, we've seen all these data hacks that have happened to even some of the biggest and seemingly most secure companies in the world. Building in a decentralized way and storing data in a decentralized fashion is much more secure. The other thing is just about user experience. That goes a couple different ways. One thing to make it super tangible is right now every time we log onto a new application and we create a new account, we have to go through the same process of adding our name and linking our Facebook, and it's super tedious and it's a terrible user experience. But when I actually have one vision of my profile of who I am as an user that I own, and I can just access and permission different applications to view, there's a world in which I just sign onto a new account and all of my information is automatically populated for me. Or somewhere where, for example, I go to a new Web3 Twitter, and instead of having to start over and lose all my historical data, I can actually see all of my followers or all of my friends that I have as opposed to today's world where if I get kicked off of Twitter for any reason, I lose all that information, even though it's seemingly mine and linked to my account. Actually, if you leave it, it just really brings to bear how much Twitter and these companies are really the ones that truly control and have ownership over that information. Right now, because Twitter, for example, owns that underlying information, I have no power over what I see when I look at my newsfeed, for example. Whatever they want to show me, whatever their master algorithms are presenting to me that morning, I have to consume. But it'd be really interesting to imagine a world where, because I own that underlying information, I can basically go and have much more customization in a Web3 world where I can move either to different platforms if I don't like the content that they're serving me or have a much more customized newsfeed based on my underlying data that I allow that application to see versus just having to basically consume whatever's being presented to me by the company.
Jessica Galang: These platforms like Facebook that have been the go- to social network for decades now have had a monopoly on our data for a long time. That data isn't going away. But if people start to move onto equivalent platforms on Web3, will we start to see that data traditionally held by these companies move out of these silos and into Web3, or is Web3 the next generation of the internet where we build new identities?
Lauren Feld: One of the things that people don't realize is there are better regulations that try to empower users is to get access to and control over their data as it exist today. On Facebook, you technically can go and download a copy of all of your historical data. It is so hard to do, and it basically looks like a whole bunch of gibberish that most people can't make any sense of, and I think they do that on purpose. I think we could see a world in which some companies or applications make it really easy to actually be able extract that information and to put it into a Web3 open system. I don't think that's out of the the realm possibility. I do think right now, what we're seeing is more the first half of your question, where people are just starting from scratch and starting with this new kind of Web3 native identity where I create an account and there's not a lot of history or real world reputation to it. I think that's actually why reputation has been this breakout use case that everyone's talking about, because as more activity actually starts to come online with Web3, people realize the importance of anonymity of Web3, and a lot of people want to be anonymous, but there's actually a lot of value to having some kind of reputation around these address- based systems. What people don't realize is those two things aren't in conflict. You can have an anonymous account that's not linked to some sense of a real world identity or persona, but still have reputation around it that makes it powerful and trustworthy in an open context. Yeah, I think people are starting to get smart about how we link the two, the links between Web2 and Web3, to make that more concrete. We're seeing a lot of people start to do verification services in Web3. Basically, having you link your Web3 address to your Twitter, and you do some proof that shows that this account has ownership over some Twitter account, and then you get issued a credential that shows that you're a real human, for example. We're seeing that a lot in some anti- Sybil use cases where people want to show proof of personhood and make sure this isn't spam or bought, a certain address. But it's not just about that. It can also be in the Dow ecosystem. For example, people want to see before I'm going to hire someone and pay you$ 100, 000 a year, I want to know that you're not only real human, but I also want to see reputation based on how you participated in other ecosystems or other contexts to basically get a sense of how good of a citizen you will be in our community.
Jessica Galang: I want to dive into that. Right now, probably the things that comes most of my mind in terms of proving my activities like credit scores, for example. If I'm trying to rent an apartment, then I can use my credit score to prove that I'm financially sound, I guess, for lack of a better word. In this new Web3 world, is reputation going to be as much tied to digital identity as your name, your address, date of birth, and what does that mean, I guess, for how we understand digital identity?
Lauren Feld: Yeah, I think it's super interesting. I think it definitely depends on the use case, right? I think people that are thinking about lending and a lot of DeFi use cases do actually want some sense of KYC, especially as more regulation is coming online. But I think there are somewhere, none of that matters. No one really cares about your actual name or where you live or any of that boring real world stuff. They just want to know how many governance proposals have you voted on before? How many comments have you left on those proposals? Are you active and engaging in communities? Do you add value? Are there attestations from peers that show that you did a good job on X, Y, Z bounty or some work project that you participated in with them? That's all that matters, and I think that that's very much the Web3 ethos of people thinking about democratizing access to things because the idea is hopefully this removes some bias of I don't care as much about what you look like or where you are. I just care about how you show up.
Jessica Galang: Interesting. Is there any privacy considerations here? People can look at your activity on blockchain or any records of what you're doing. Will there be any concerns? I know that there's some... Like you were talking about how people are anonymized, but maybe in some context, they can't. Just curious about if you've been thinking about that space or if there's anything to consider there.
Lauren Feld: Yeah. I think this is such a hot topic in this space, because again, in the beginning, a lot of people were excited to basically hide behind a wallet address and not have to link to any sense of real world identity. For some people, I think that's really compelling about the space, but certainly not for everyone. I think the thing that's tricky is a lot of these protocols such as Ceramic are really open data networks, right? You have concerns about, well, what information truly live on there? If you put things on there, who can access it and how do I actually... If I own my information, I think ownership is one half of the data sovereignty coin, but the other half is also ensuring that it's private and I know who can actually view and access it. On things like Ceramic, for example, even though we're public network, you can encrypt and store data on Ceramic, and we're working with other third parties that are experts on encryption and thinking about how you can do gated access to encrypted content, for example. Or if you have really sensitive data, for example, the conventional wisdom is that nothing incredibly sensitive that you would never want to be a real publicly should live online. You might still have some of that data and private data store. For example, we were with a team called Spruce and they have something called Kepler that's really focused on private data use cases. You might have that data actually live offline, but you can still have an online pointer to it, so it's still publicly discoverable by people. Yeah, I think there's privacy at a lot of levels. There's privacy at the data level itself and making sure that you can secure content. I think that all comes down to really granular access control, if you can encrypt data and just having control of who has those encryption keys and how do you as the user know who has access and for how long they have that access will be really critical. We're working on some systems right now that are basically building these advanced capabilities to do that, but it's definitely a difficult part of the equation. The other thing I would say is then more just at the account level, right? Most people still identify themselves in this space as a long string that is their address, which is not an easy human readable name that people can understand. I think that's why things like ENS have taken off because people, we're human. I like to think about you US Jessica and not XYZ 7652, whatever.
Jessica Galang: Do you think that there's ever going to be a point where the principles or ways that we do things in centralized systems will make their way into decentralized Web3 projects?
Lauren Feld: Yeah. I think this is a huge conversation because so many projects are still at some level pretty centralized in the space. I think most people who live and breathe it understand that it's a progressive path to decentralization and that we all have the same end goal, but you have to take a staggered approach, especially because a lot of the coordination mechanisms and governance mechanisms are so new, we're still figuring out what works to actually build those fully decentralized systems. Not just from a technical level, but from a coordination and human level.
Jessica Galang: For those who are just wrapping their minds around Web3, it can be hard to imagine what a Web3 internet will look like. From a day- to- day UX perspective, what changes? Will we just have a decentralized online grocery, a decentralized Amazon? Is there a way to visualize this?
Lauren Feld: I think it's a good question. Yeah. I definitely think that my mental model is when the internet was first created, the Web1 was very decentralized in terms of the rails and infrastructure, but it was very lackluster user experience, like really static, webpages very one directional. Web2 was a much more dynamic, and that's where we are today. A much more experience, significantly improved user experience, but we start to recentralize at the platform level with a couple of companies owning a lot of this kind of digital space. I think Web3 is about going back to the open infrastructure of Web1, but with Web2 experience. Yeah, I don't know that it's going to look a whole lot different, right? From the UX perspective, visually, I don't know that we're going to see some kind of flying Jetsons, Google homepage type situation. But I think you can see a world, we're already seeing it, most Web3 applications when you go, it's not sign in or it's just sign up and put in your email and password. It's connect your wallet. Right? That's the prompt. I think we're starting to see these small changes in user behavior and the way that we interact. But I think a lot of it remains the same. Obviously today, a lot of Web3 tech is still pretty slow, so that UX isn't great. But the North Star where we're all trying to go is basically having performance that's on par with Web2 technologies.
Jessica Galang: Okay. Is there a cold start problem to getting Web3 applications off the ground? I think of in AI, for example, if you don't have the data to work with in the first place, and you're trying to train your AI in limited data sets, it's not really going to work in the way that you expect. I'm curious if that's a similar issue in Web3 right now, since it's something everyone's working on and figuring out at the same time at the same pace?
Lauren Feld: Yeah. No, I think that's very real, and I think that's just the problem with networks in general, right? You have this two sides of the coin and you have to figure out where you, which side you build up first. For us at Ceramic where this data network, we're focused right now on getting people to just start to write and store data on the network because we need to have a large pool of information existing there in order for people to find it useful. But really, the long term vision, we think the other side is much more interesting in terms of people actually reusing and sharing data across the network, so basically reading rather than writing, but we have to pick somewhere to start. Yeah, I think that is the trick, and that's why you see so many people writing about network effects and how to build network effects and creating these flywheel within the Web3 ecosystem, and it's hard. It's hard especially when so many people I think are trying to do the same thing at once. As much as I think there's a lot of collaboration in the space, there's also a lot of divergence happening at the same time.
Jessica Galang: Okay. What is that divergence? I'm interested to hear more about that.
Lauren Feld: Yeah. I think about this. This has been super top of mind for me with just standards. That's a big thing in the Web3 space of people thinking about these technical standards, like how do we build things with set, for example, schema. Schemas can sound super technical, but it basically just defines any data that I'm storing in a data network, what is actually going to be stored in that field? I could have something that basically says a follow list and that describes how I would want a social connections follow list on a social platform, for example. That's just one of many, but a schema could define any type of data. You're seeing a lot of people who are working on similar use cases and are all starting to build different schemas, for example, and having these different schemas make it really hard for them to interact together. That's a big part of what we're trying to do with Ceramic, is basically create incentive models via the Ceramic token on our network when we have it to basically help to encourage reuse of schemas so people can start to build on these shared systems so that they can all talk to each other and you can share data across different applications. But doing that is really hard, right? Because how do you get a bunch of companies that are working on similar things, that may in some way see themselves as competitor, to come together to build infrastructure that is collaborative? I think in general, people in the space have the ethos of a rising tide raises all boats and we need to work together. The vision of Web3 is very much around composability of information, but still hard to just get your ducks in a row when there's a lot of different players that you need to bring together that all have their own roadmap and own vision of how they see things playing out.
Jessica Galang: Okay. For maybe a business, especially in the last five years, I'd say, if you goes by the ethos that building a data mode is where you're going to find the most business value and having that differentiation, and is now hearing that Web3 is all about decentralization and collaboration and is maybe in panic mode just considering, well, how do I, at least even if I don't transition fully, reconsider the role that I play? What should businesses be thinking about at this point?
Lauren Feld: I think they should be very scared, honestly, because I do think that the wave is coming. Obviously I wouldn't be working on this if I didn't believe that. But I think that users and consumers are powerful and there's already been such a push around data privacy and data sovereignty, and I think people don't even realize that there are actually tools out there to truly make that a reality, and once they realize it, I think it will be a crushing wave that some of these large monoliths can't compete with. It will be interesting to see who adapts and who's able to find ways to compete in this market. I think that my thesis is that even in this new world, and I think especially in this new world, companies will have to start competing on user experience, and basically how novel their logic and their front ends are. Right? How great is my user experience? Because I don't have the lock in that I had in Web2 where I don't want to leave you because you have all this information of mine there and all this network effect. Basically, it's very easy for me. There's less lock in, there's less friction for me to leave and go to other places. They really have to serve the user, I think, in a very different way than they do now. I think that these big companies still have huge advantage in that they have experience with that. One thing that people see and complain about a lot in the Web3 space is it's very technical and there's not as many people who think about product and who think about user experience and design. I think people are getting smarter about that and the best applications in the space are really improving there. But a lot of people just focus on the tech. One thing that bothers me so much in the space is when you go to sign a message in a wallet, it makes no sense to inaudible. Even for me, who's been in the space, I'm like," What is this that I'm signing?" That is not the way that I'm used to interacting on the web, and I don't think that the average person is ever going to feel comfortable with that and really want that to be their daily interaction online. I think that they still have this benefit of they know how to build great products. It's not just at the data. They know how to build products that people want to engage with, that keep them there, that feel like seamless and low friction. I think if they can figure out a way to adapt and a new business model behind that, then there's hope. But I think for a lot of them, it's going to be really hard to basically undo the way they've been operating for, in some cases, decades.
Jessica Galang: Yeah. On the competition side, you're saying that because people have so much more ownership of their data and are empowered to make decisions from platform to platform, it'll be much more difficult for them to retain them unless they deliver superior services. Is that accurate?
Lauren Feld: Exactly. Yep.
Jessica Galang: Awesome. I want to go back to the idea you're talking about with incentivizing more people to work on Ceramic and add data to the network. Is the idea then the more data that you get, the more that we're going to see maybe more of those uni swaps or those really innovative businesses that define, I guess, that generation of technologies?
Lauren Feld: I think it's just the more companies that you see or the more applications that are reusing the same data set, I think the more powerful and the more it ingrains the value into the users. Maybe to make that tangible, I mentioned profiles before. We've actually, the 3Box Labs team has built something called Self. ID. You can go to it. The website is literally self. id, and create a profile of yourself. You can use your wallet to connect, you'll get a DID that's generated for you, and you can add in a PIP, a profile picture basically, and then some basic information about yourself. Now there's a couple of other applications that are also using this same basic profile schema, like I mentioned before, and they're using the same underlying dataset. Now, if I were to go to another application, one is called Dow House, which is a tool that allows me to very easily basically create a Dow entity. I can log on there with my wallet and I'll see my profile populated. If I make a change there, that change will now cascade and I will see it in Self. ID and any other application that is using this basic profile schema basically. I think that is what makes it really real for people, is when you actually go and you see," Oh, look, my information is here for me," or I start seeing now because of that, I go onto a new application and I start seeing recommendations maybe of certain people that I should follow based on now my account and what I've created in that profile, and I start to have these really customized experiences. I think that's what makes it powerful to people when they start actually feeling like the user experience benefits and seeing that improvement. I think when you just have one app using it, it's interesting because philosophically, it's decentralized and open and you own it and it lives with you > but it actually becomes more powerful and I think easier to really understand why it's so novel when you see it being used across a bunch of different applications together.
Jessica Galang: All right, Lauren. Thank you so much for joining us today and for giving us a look into what's in development in this exciting new field. I think you've given our listeners a lot to think about, and we appreciate you taking the time.
Lauren Feld: Yes. Anytime. Thank you so much for having me, Jessica. It was super fun.
In this episode of the Georgian Impact Podcast, we sit down with Lauren Feld. Lauren is Head of Business Development at 3Box Labs, the company behind Ceramic, a decentralized data network that allows developers to build apps with Web3 data.
Lauren breaks down the problems Ceramic is trying to solve and how we should understand digital identity in this new world.
You'll Hear About:
● The difference in building Web3 applications compared to Web2.
● Moving away from centralization and getting users back in control of their own data.
● Different use cases for people building Web3.
● The importance of identity in building Web3.
● Where Ceramic lives in the ecosystem of Web3.
● How protocols like Ceramic are helping to enable innovation.
● Will existing data in Web2 move into Web3?
● The role reputations will play in digital identity.
● Crossover potential in centralized and decentralized projects.
● What a Web3 internet looks like.