Why foobar Built Delegate Cash (and Why Web3 Needs to Do Better)

Few individuals in Web3 have contributed as much to the space as 0xfoobar has. The machine-learning specialist turned software developer, auditor, and founder is a prolific voice in the NFT scene, highlighting security flaws in project contracts and advising the community on the space’s most popular trends. He’s also one of its more steady-handed pragmatists, viewing Web3’s evolution on a long-term scale.

While foobar has had a hand in several Web3 endeavors over the years, his most well-known accomplishment may be the creation of Delegate Cash, a service that allows users to create and assign hot wallets as a delegate for wallets that actually store their NFTs. While that might not sound sexy on its face, the value of such a service is hard to overstate, as it lets users interact with the Web3 ecosystem without exposing their tokens to security risks. 

In an industry infamous for its scams and risks, Delegate Cash has brought a crucial measure of confidence to the decentralized world. Web3’s biggest names recognize this; Yuga Labs, Art Blocks, and Manifold rank among the organizations that trust the service, and for good reason. Delegate Cash is on the move again, with foobar having announced Liquid Delegates in January, a promising new addition that will allow users to wrap delegation rights into tradable tokens. 

We sat down with foobar for an interview covering the future of Delegate Cash, his thoughts on what Web3 is lacking, and the potential of AI tools like ChatGPT to upend existing power structures. 

nft now: What was it like making the jump to Web3 from machine learning? Your first NFT was a CryptoPunk, wasn’t it?

foobar: Yep, that’s right. Back when they were single-digit ETH. They were the community I first looked up to when I entered the space, and so I felt like I’d finally made it when I could scrounge up enough to get one. The biggest contrast in Web3 [from the machine learning world] was probably the openness. In the machine learning world, I saw how smaller, scrappier open-source competitors were eating the big boys’ lunch in a way but were completely hamstrung when it came to computing.

Whereas crypto was almost the opposite. A single, sharp, competent dev could put together an entire app and have it run until the end of time, mostly autonomously. That felt greatly empowering to me. And it also seemed clear that if this is the space where the smartest, sharpest individuals can prove themselves, then the space itself is going to flourish.

“If this is the space where the smartest, sharpest individuals can prove themselves, then the space itself is going to flourish.”

foobar

nft now: What parts of the space aren’t flourishing?

foobar: So far, the Defi ecosystem is this waving mass of complexity. People are building trustless options protocols on top of Uniswap v3 LP positions. You have a lot of this theoretical power and theoretical composability that’s come to light in terms of apps, but none of it has really trickled down to the median user experience yet. And so the crypto app ecosystem as a whole remains very elevated above or below what people need.

If you’re extremely self-driven, self-motivated, and have a strong background, you can figure out what’s going on; that’s the best place to be. But in terms of the median person who’s trying to send some USDC from one place to another, there are still a ton of UX improvements that need to be made on that front. There probably need to be more boots on the ground for actually linking these to the practical realities.

nft now: Is that a failure of Web3 devs or just the natural pace of evolution for blockchain-based tech, in your view?

foobar: It’s a combination of factors. There aren’t that many competent devs in crypto at the moment. So, people have to choose where to put their time and energy. And there are many competing arenas on that front that take months, not years, to play out. So, it’s entirely rational to focus on those. There are also other barriers, for example, where it’s very difficult to create real-world assets that would have immediate utility.

It’s not a lack of technical skill. It’s a lack of regulatory willingness to say, put houses or put commodities on the blockchain. The barriers to that are not technical; they’re largely political, regulatory, and so on. Many people just don’t have the proper skill sets to be fighting both those battles at the same time.

“There aren’t that many competent devs in crypto at the moment.”

Foobar

nft now: You’re well-known in Web3 for calling out security issues and trends. How do you view your role in the NFT conversation?

foobar: I appreciate being able to speak my actual mind on a variety of issues to a larger audience and be able to hopefully shape thinking on those fronts. I don’t have a strong agenda on breaking hack news, for example. It’s just that I can count on one hand the number of people who have both the technical depth to understand an emerging hack story and also the eloquence to be able to convey that in an understandable way. I’m not the only one in the world that’s capable of that, but I seem to be one of the very few who are interested in doing it.

nft now: Why would you say you have an interest in doing that?

foobar: I think it helps so many understand what’s going on. Because it can be terrifying when you just see madness and craziness, hundreds of millions of dollars flowing across the timeline, but nobody actually knows if up is up and down is down. So, I appreciate being able to help out in that way.

I also have lots of strong opinions on how culture shapes tech, and I think it’s pretty critical to preserve the Cypherpunk culture of openness, decentralization, permissionlessness, and privacy that Bitcoin was originally founded on. I don’t know that it’s possible to fully preserve original principles, but the actions laid in the early days before protocols ossify have larger downstream effects than you think. So I’d like to do what I can to promote decentralization, privacy, and so on.

“The actions laid in early days before protocols ossify are have larger downstream effects than you think.”

foobar

nft now: What are some of the best and most immediate ways for the average Web3 user to educate themselves to recognize these issues when they happen?

foobar: That’s a great question. I’d say that curiosity can be your biggest asset. Even if you don’t understand how things work, wanting to understand goes a very long way. For example, you hear about Bitcoin; it has no central issuer, the natural question is, ‘Okay, but what if I make up my own Bitcoin, then wouldn’t it be just as valuable?’ And you don’t really need a coding background to Google around or read articles or ask a friend to figure things out.

For me, it’s oftentimes knowing that I don’t know anything and then going down the rabbit hole of superficial questions leading to more advanced ones. And in terms of resources, I’d say that the combination of Google and now chat GPT and Twitter Advanced Search go a very long way. I’ve curated a quality list of people I follow, and being able to search a topic and see what those thousand-ish individuals have said in the past about this topic has been a great research tool for me.

nft now: Let’s talk about how Delegate Cash came to be. What inspired you to create it?

foobar: The origin story is pretty funny. I have seen so many people, both unsophisticated and sophisticated, get their clocks cleaned through one moment of weakness, one phishing site, or one bad signature. It distracts from more advanced, on-chain interactions you could do because everybody’s scared to interact on-chain. So, it’s just a gigantic roadblock to the entire space. It hurts individuals most obviously, it hurts the communities, and also hurts innovation. 

“You just had this combination of thought leaders giving impractical advice and people not following it and getting screwed.”

foobar

I had it in my mind that in 20 years, we’re not all going to be minting NFTs from a hot wallet that keeps our life savings. But the alternatives that people offered — just use a safe, just use a Ledger — even the people offering that advice weren’t following it. You just had this combination of thought leaders giving impractical advice and people not following it and getting screwed.

So, the question in my mind is, ‘What’s a feasible approach that can protect people, but it’s simple enough that they’ll do it?’ I came up with Delegate, which lets you still have all the advantages of complex setups like a Ledger but still lets you keep all the UX advantages and speed and ease of use that you get from a hot wallet. Because it’s clear to me that mobile is the future. And so you have to still let them interact easily on chain. And this was the solution we came up with, and it’s been a huge hit.

nft now: In January, you published a blog post about the next step for Delegate Cash. What can you tell us about Liquid Delegates?

foobar: Liquid Delegates is the first way to tokenize NFT utility in a completely decentralized, trustless way. The space is getting more advanced and evolving. You have all these downstream effects holding tokens where they are the gateway to all this utility. But until now, there’s been no good way to actually compose them across other Defi and NFT infrastructures.

The status quo of NFT rentals, for example, requires extreme over-collateralization, where you’re really selling covered calls. And that suffered from a lack of good liquidity. The aim with Liquid Delegates is that we’ve made it extremely easy for individuals to interact on chain again with the delegation registry. And now Liquid Delegate makes it easy to tokenize those on-chain interaction rights and move and trade them around.

nft now: What are your views on the controversies surrounding AI tools like ChatGPT?

foobar: It’s hilarious. The machine learning world is running into so many of the same roadblocks that crypto has been dealing with for years. It’s fascinating to watch. ChatGPT passed the bar exam better than 90 percent of lawyers, then they neutered ChatGPT so it doesn’t give legal advice anymore. Somebody used an AI synthesizer to have Drake’s voice sing a new song and it quickly shot to number one on the charts before it was taken down via legal threats. 

“It feels like this stuff has reached escape velocity already.

foobar

Basically, what we’re seeing is that so many of the laws that have been written simply don’t make any sense or apply to these novel emergent cases. And we’ve seen this in the crypto world for quite a while. The question is, are the benefits of this novel technology obvious enough and fast enough to a general population that can outweigh the incumbent interests who try to outlaw or ban something? And it seems to me that AI tech has already reached that point.

It’s going to be difficult to put the cat back in the bag. I don’t doubt there will probably be individual industries that fight tooth and claw to protect their own members. But speaking generally, it feels like this stuff has reached escape velocity already.

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