Weekly Updates

Q&A with Spruce Founder & CEO Wayne Chang

Following Spruce’s launch this week and announcement of their collaboration with the Tezos ecosystem, we sat down with Spruce’s Founder & CEO, Wayne Chang, to learn more about the company and how it will advance the Tezos project.

Wayne Chang

What problem does Spruce solve? How did Spruce come to be?

Spruce is a digital identity company that reimagines trusted interactions for enterprises and governments. We help our customers create trusted digital ecosystems that reduce transaction costs for business dealings and government services by incorporating real world facts throughout their workflows in a standards-based way. Our products handle statements about an ecosystem’s actors and assets, including certificates, licenses, audit reports, and formal approvals, packaging them digitally so that they are tamper-proof, information minimizing, and traceable within a data supply chain. They can then be shared privately and securely to correctly permissioned parties. To foster transparency and interoperability, we will release our core products as open source.

The Spruce team first worked closely together for a number of years at ConsenSys, where we gained extensive experience collaborating with enterprises and governments on emerging technologies such as digital identity, applied cryptography, cryptoeconomics, and smart contracts. While at ConsenSys, our team won the NYC flagship BigApps competition in 2019 for our approach to solving real estate management for the NYCEDC using digital identity for assets. We also participated in several global digital identity standards bodies and industry groups, and continue to do so today. After our departure, we reflected upon our collective learnings and decided that this was the most important and meaningful problem that we could solve.

 

Why is decentralized identity important?

We believe that decentralized markets, which transact in a more peer-to-peer way as opposed to through a few (or singular) powerful brokers, have enormous potential to make all participants better off except for rent-seeking centralized actors. It also increases the control and privacy enjoyed by individuals and smaller companies. Many classical economists interpret “free markets” as free from economic rents, compatible with regulatory frameworks and other forms of governance. To enable this shift, trust brokering too must move to a decentralized model.

For the most part, people are comfortable with stepping into Uber cars and Airbnb homes. These brands go great lengths to build trust and credibility, including background checks, million-dollar home guarantees, reputation systems, and online dispute resolution. This is also why people are generally not okay sending a transaction to a random hash address on a publicly-viewable blockchain and then stepping into the next car that pulls up. We think that verifiable information is critical enabling the three pillars of market design, a theory in which the economist Alvin Roth stipulates the necessity of thickness, congestion, and safety across all markets.

To ensure compatibility with peer-to-peer ways to transact, we must also adopt peer-to-peer ways to handle the issuance, transfer, and verification of trusted information. Consider a rideshare driver selling services within a decentralized marketplace who presents a valid license and driving history digitally-signed by the local DMV, proof of insurance from Geico, and a clean background check issued by Checkr (the same company used by Uber), all privately and securely without an intermediary. With this model, we are that much closer to a reality in which the trust portion of transaction costs within a decentralized market are no longer prohibitive, and the platform’s take of the revenue moves from 25% to $0.25. The surplus goes to the consumers and actual service providers.

We therefore think decentralized identity is important because it is beneficial to user control and privacy while also making good business sense. We think decentralized identity is key to enabling a myriad of new configurations for specialization and trade, and we view our open source products as tools for digital market design practitioners who structure markets by improving thickness, congestion, and safety.

 

What drew you to build on Tezos?

We collaborate with the Tezos ecosystem in two primary ways: (1) we use Tezos as a core dependency and (2) we create public goods for the Tezos ecosystem towards enterprise-ready components around financial assets, government transparency, and other emerging use cases involving trusted information. We don’t have our own blockchain, and we don’t have a token.

We found an excellent alignment between our goals as a company and the Tezos ecosystem. At a high level:

  • Tezos’ protocol is upgradeable and has privacy-enhancing primitives on its roadmap for mainnet, core capabilities our customers have asked for to ensure future-proofing and long term sustainability.
  • It’s the only ecosystem we found to have the combination of a battle-tested mainnet, active developer community, and smart contracting languages designed to support functional correctness checking using proof assistants. We are focused on use cases which can require high assurance, so this allows us to satisfy such requirements across the whole stack, down to the blockchain protocol level where applicable.
  • Its design around on-chain governance pairs well with the notion of machine-readable trust frameworks that underlie decentralized identity systems.

You can read more about this in our blog post which describes our collaboration with the Tezos ecosystem at length.

 

What three things are you most excited to see built on Tezos?

  1. We are excited to work with the Tezos community to formalize existing activity as verifiable credentials, including baker statistics and on-chain governance. This will make the ecosystem’s reference data more tamper-proof, traceable, and interoperable towards better accountability. Because Tezos accounts are based on asymmetric keypairs, it is especially straightforward to lift them into decentralized identifier usage. We will leverage these cross-network effects into widespread user-owned credential usage.
  2. We’re excited to see the next iteration of Better Call Dev which is the most advanced public smart contract explorer we’ve seen across any ecosystem. We imagine it as the first piece in a whole suite of interconnected best-in-class tooling to improve the developer experience, and we expect they’ll experience immediate success when deployed across enterprise environments.
  3. We look forward to the arrival of BFT consensus algorithms with immediate finality, such as Tenderbake and chronomint to Tezos mainnet, which in our experience are enterprise-friendly and typically only found in permissioned chains. The Tezos protocol has already undergone several successful protocol upgrades, so to us the platform has been derisked significantly.

Additional Ecosystem Updates:

In March of this year, the Tezos Foundation and other defendants entered into a settlement, subject to court approval, of all putative class action lawsuits pending in California state and federal courts. Today, we are pleased to announce that the court has approved the settlement and this litigation is officially over. Lawsuits are expensive and time-consuming and we are pleased that this one is in the past so that we can focus all of our energy and attention on supporting the long-term success of Tezos. With that in mind, here are some updates from around the ecosystem this week:

FAQs

How is the search for the new TF president (Executive Director) going on? When can we expect to hear about this hire?

The hiring process of a new Executive Director of TF is a long process which requires a lot of diligence. It is being handled by a UK based executive recruitment firm. We expect to have the hiring completed towards the end of 2020. 

 

When is the new biannual financial report going to be published?

We are currently in the process of finalizing content for the latest biannual update and expect to have it published in September.

 

Why hasn’t the Tezos Foundation ceded baking rights to the community yet? Surely by stepping back from baking, there would be an increase in bakers coming online to capture the newly freed up share of block and endorsement inflation? Wouldn’t this be a good step towards greater decentralization of the protocol? And wouldn’t it give more power to the community? Why not step back gradually by removing 1 Foundation Baker every 3 months or so to get an idea on how this would impact the security of the network?

As we’ve stated before, we do not currently have plans to shut down Foundation baking operations but this question regularly comes up in Foundation deliberations and is consistently being evaluated. The Foundation’s purpose is to support the Tezos ecosystem, and all baking rewards that the Foundation receives will eventually be used to further support the advancement of the Tezos project.

 

What sort of outreach is the Tezos Foundation making to increase awareness of the Tezos protocol, either through general marketing, or through business development?

We have undertaken a number of initiatives to increase awareness of the Tezos protocol, both from a general marketing perspective and via business development outreach. On the general marketing front, the Tezos Foundation has provided funding to a number of entities around the world who focus on coordinating marketing efforts and driving awareness for Tezos. Tezos Commons, Tezos India, Tezos West Africa, and TQ Tezos, are prime examples. We believe global alignment across regional marketing efforts within the ecosystem help consistently position and scale awareness for Tezos. The goal is to ensure that Tezos is seen as the blockchain of choice for developers and teams building on a blockchain in the future. That said, if you have a specific marketing opportunity and would like to be considered for funding, please reach out to us at [email protected].

On the business development front, the Tezos Foundation and entities around the world are entering into a number of partnerships with well-known entities to drive industry adoption for a number of valuable use cases. While our early focus was on improving the protocol’s tooling and infrastructure to make building on Tezos easier and more secure, we are focusing more every day on the development of end-user applications and high-value business applications. We are committed to aggressively and effectively deploying funds to grow the Tezos ecosystem globally and make Tezos easy to adopt.

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