Token Curated Registries — Reflections from Ryan Selkis, CEO of Messari
Tags: Bitcoin, Blockchain, Ethereum, Cryptocurrency, Venture Capital

Recap of a talk from Ryan Selkis, Founder and CEO of Messari, at the (Off) The Chain Summit presented by Pillar as part of Boston Blockchain Week.

Ryan Selkis, Founder and CEO of Messari

Ryan Selkis is the Founder and CEO of Messari, a company that promotes transparency in the crypto industry through an open-source data library, also known as a token curated registry. According to Mike Goldin, who pioneered the token curated registry concept, they are decentralized curated lists with intrinsic economic incentives for token holders to curate the list’s contents judiciously.

Find key highlights below from the talk Selkis presented at our recent (Off) The Chain Summit presented by Pillar.

Decentralizing the Creation and Curation of Lists

Lists are one of the few concepts in cryptocurrency that pre-date money. Since the dawn of human civilization, people have kept mental or written lists, whether it was of people, things or ideas. Why? Because, as Selkis explains, “Lists help minimize our mental transaction cost when trying to make decisions.”

By having a list that we continuously curate, we make it easier to discern between the things that may or may not belong on the list. To make it even easier on ourselves, we sometimes enlist “trusted experts to help with the curation.”

So what does this all have to do with tokens? Typically, the lists (registries) we reference as consumers are controlled by a central authority. They’re naturally subject to bias and require maintenance by a single entity to remain current and fresh. Token curated registries transform this model by putting the power to create and curate lists into the hands of the people (stakeholders), leveraging tokens to incentivize this behavior.

“Token holders dis-intermediate the traditionally centralized institutions that generally make the judgement call.” — Ryan Selkis (Founder & CEO, Messari) — Click to Tweet

Here’s how it works —

Consumers: Use the list to help them make decisions Candidates: Pay an “application fee” to be listed Token Holders: Purchase stakes in a list so they can vote on new additions to the list Curators: Help maintain the list — responsible for voting in and voting out the candidates (token holders can be curators)

Candidates who want to be part of a list use tokens to pay their application fee and buy an opportunity to be included. This isn’t a guaranteed spot on the list, but rather, the chance to be included. A community of trusted experts are then incentivized with tokens to vote on the initial contents of the registry, and maintain it over time.

These lists can be lists of anything — service providers, data sources, advertisers. In Messari’s case, the company is curating a list of reputable crypto projects that comply with certain regulatory disclosures. Token holders and curators act as the decentralized decision makers, disrupting centralized models.

Token-Curated Credentials

Selkis sees token curated registries taking the strongest hold in industries where “quantifying the value of certain credentials in modern markets” makes sense — such as telemedicine, advertising, and more.

“I think about the early winners of token curated registries and the healthiest ones have four characteristics,” said Selkis. Summarized in the slide below, these characteristics allow for the continual curation of the registries to ensure that the list does not get outdated, and that the information within the list remains valid.

Slide from Ryan Selkis’ pitch deck

The Messari Approach

Messari has taken the idea of a token curated registry and applied it to the token economy, creating a “token white list” for projects that meet certain regulations and disclosures. This approach solves three main problems for the market as it stands today:

Regulatory transparency Lack of fundamental analysis of the assets No common denominator of data (ex. data found on the first page of an S1)

Selkis noted that earlier this year, SEC Chairman, Jay Clayton, posed the question, “Are there opportunities to deter, mitigate, or eliminate wrongdoing before an enforcement action becomes necessary?”

The answer, Selkis thinks, is transparency.

“If you shed a little light on what’s going on, and find a way to standardize [the] information, you can probably go a long way towards solving some of the SEC and other equivalent regulatory body’s concern,” asserts Selkis.

But taking away some of the SEC’s headache isn’t the only benefit. By standardizing some form of disclosures and language across the board, fundamentals analysis of these different assets becomes possible, explains Selkis. Then, it’s not just 100% sentiment driven in this market.

Finally, Messari plans to create a “low-level data service that is free, open source, that anybody can access over time and build on top of, that can serve as the lowest common denominator as some of the information in this industry.” Similar to the information on the first page of an S1, this information will allow companies to stop spending their time and energy to find simple information that should already be readily available.

Enforceability of Reporting Standards

“The real challenge as you think about data integrity and as you think about some of these open platforms such as Crunchbase, Angelist, and others, is enforceability and how quickly this information gets stale,” said Selkis.

He thinks token curated registries have the potential to solve this. “If you can get the major regulated stakeholders in the industry — the funds, the exchanges, the advisors, the underwriters, to buy stake in a system where they are the voters and they control which projects get into the registry and which projects stay on over time based on their willingness to abide certain table stakes type of disclosures about their monetary supply, how they actually liquidate their treasury tokens, how they manage their treasuries, and the like,” then it is likely the data will remain both up to date, actionable, and clean.

To learn more about Messari, read this article written by Forbes.

Written by: Katie Mulligan