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Article by Hiro Kennelly. Edited by Frank America. Cover by Cosmic Clancy.
We use our crypto wallet every day; it’s one of our most important possessions. With our wallet, we check account balances, connect to dApps and DAOs, port into the metaverse, and keep our digital assets safe behind private keys.
Most crypto wallets are owned by for-profit companies. Coinbase Wallet is owned by Coinbase, a publicly-traded company. Trust Wallet is owned by Binance and MetaMask is owned by ConsenSys, both of which are private companies. These companies earn a surprising amount of revenue through in-app token swaps, collecting fees for transacting within the wallet. The fees earned by MetaMask have fluctuated between 500,000 and 2.5 million USD per day during the past year.
Credit: Tom Schmidt and Dune Analytics
One month before MetaMask launched its in-app swap feature, ConsenSys decided to abandon its permissive MIT open-source software license, adopting a tiered approach to licensing. This restriction didn’t sit well with the team at Thesis, a group of crypto-natives who were in a position to do something different.
We’ve assembled a team at Thesis to build Tally: a community owned & operated Web3 wallet that will end the ConsenSys monopoly on the Ethereum stack.
Thesis is a venture studio focusing on products and protocols that stay true to the principles of decentralization, sovereignty, and privacy. These builders began dreaming of a crypto wallet with more functionality than MetaMask, but one that was community-owned and governed by a DAO. Tally is the manifestation of this vision: MetaMask but as a DAO, where everyone holding their token can benefit from transaction fees.
The internet was built with open-source software, most notably the operating system Linux and the web server Apache. The collaborative efforts by a diffuse network of early tinkerers and computer pioneers built the internet. As the web expanded, companies began to incentivize for profits, and the collaborative nature of the early web began to fade.
Web2 started off as a fertile garden of blogs and spontaneous user-generated content. But over time, that garden became gated by Twitter, Facebook and others, where the producers of content were the products sold for advertising dollars. Web3 breaks down these walls.
Web3 seeks to bring us back to the open-source and community-built ethos that gave us the internet.
The term Web3 is often attributed to Ethereum co-founder and Polkadot founder Gavin Wood, and in many ways it’s a blockchain-based response to the corporatization of people and their data. Web3 seeks to bring us back to the open-source and community-built ethos that gave us the internet, all catalyzed by the incentivization engine we call the blockchain. Web3 allows us to invert traditional economic models; it allows us to create a product that also functions as a public good: a Web3 wallet with a Web3 ethos.
Tally is more than just a crypto wallet; it’s also a public good. Public goods are essentially goods or services that we all can use and from which we all derive a benefit. Public goods are things like lighthouses and roads, open-source code and Ethereum.
At the core of Tally is the belief that the key to long-term project sustainability is openness and that open-source software is essential for community ownership. The team at Tally released its code under a GNU General Public License v3 (GPLv3), even before it released the pre-alpha version of its wallet. GPLv3 is a copyleft license, meaning that anyone can use or modify its code, but that any use of its code must also be open-source and comply with GPLv3.
Think of it like a Creative Commons license for code.
By supporting open-source software, Tally is following a trend among those in the Ethereum community to focus on public goods when building their products and protocols. Gitcoin Grants is the leading public-grants program, and it has created a vast network of like-minded individuals and protocols who build with the public good in mind. Others retroactively fund public goods, supporting projects or people who have created goods that benefit the public.
Tally recently became the first sponsor of ethers.js. Ethers.js is an open-source JavaScript library that provides tools to assist developers who need to interact with the Ethereum blockchain. On a basic level, ethers.js is a repository of functions and commands that makes building things like dApps more efficient. By sponsoring ethers.js, Tally is helping to ensure that tomorrow’s developers will be able to access open-source software to build the next generation of protocols.
Tally’s commitment to public-goods funding doesn’t stop with ethers.js. Although it does not yet have a token, Tally is embedding public-goods funding into its operations. Tally recently announced that it will propose allocating 2.5% of its total token supply to open-source developers through Gitcoin’s new Aqueduct protocol. Gitcoin Aqueduct allows organizations to contribute to Gitcoin’s public-goods-focused Gitcoin Grants program — which supports builders across Web3 — while also allocating a portion of the funding to native ecosystem building, which incentivizes developers to help build and improve Tally’s wallet. Tally is proposing that 50% of the allocation go towards public goods through Gitcoin Grants and the remaining 50% be dedicated to grants rounds to help build the Tally ecosystem. If the proposal passes an upcoming DAO vote, funding should commence in June 2022.
Tally is working hard to release its full edition. While Tally continues to build out its wallet ahead of the full release, the Tally Community Edition is available for download to early adopters. The pre-release Community Edition allows you to track your portfolio, interact with dApps, and swap tokens, all while providing higher transaction success rates, improved gas estimation, and automated token discovery features.
Although Tally can set itself apart with its dedication to open-source code and public-goods funding, the real catalyst in the community-owned wallet model comes from swap fees: it’s the engine that will power the Tally community. Until Tally becomes a DAO, the fees earned from its swap feature will fund the volunteer-run Community Multisig, allowing the community to control the income stream as of the first swap. The Community Multisig has no governance powers and it exists only to safeguard the swap fees until Tally DAO and its treasury are up and running.
Even though Tally will charge 1/3 less than MetaMask’s nearly 1% swap fee, this will still mean some serious money flowing into Tally’s community treasury. What do you do with a flush community treasury? Let the DAO decide, of course.
Tally is dedicated to its vision of a DAO-owned wallet. In many ways, Tally is operating as a proto-DAO while it continues to build and organize ahead of the full release. The Tally community is also growing rapidly. Its Discord has over 11,000 members, and over 500 of those members participate in its weekly community calls.
Being community-owned is empowering for members and builders. Members are providing feedback on the Community Edition, requesting features, working on bounties, building out wallet functionality, and reporting bugs to the development team, all in an environment that fosters asking questions and sharing knowledge. These improvements then feedback into the value of the service, compounding gains for its participants. Tally is also spinning up guilds to organize talent and collaborate on projects. How DAOish of them.
Open-source code and community ownership should also quicken the pace of Tally’s development, as contributors and development teams from throughout the ecosystem will be able to build on top of Tally’s code. And when necessary, Tally can give grants to builders with particular expertise. Simply put, open-source code gives Tally a level of flexibility in its product development that other wallets are unable to achieve.
Soon, Tally expects the community to launch the DAO alongside the full version of the wallet. When Tally becomes a DAO, it will be fully community-owned and operated, which means that the community will determine the roadmap. What does becoming a DAO mean for a community that is founded on open-source code, community-owned products, and steeped in a public-goods mindset? We don’t know yet, but it may include:
Providing a basic income for DAO contributors
Focusing on larger public-goods grants
Growing the Tally ecosystem, fostering native dApps
Building new products
Improving Tally
Supporting more open-source libraries
Funding endowments
Creating ecosystem-wide contributor remuneration solutions
Tally is currently settling on its governance tooling. Without question, anyone with Tally DAO’s token will be able to vote on proposals. But Tally DAO has also been inspired by the success of the governance model of Gitcoin and ENS, both of which use a delegate voting system for decision-making. Delegate voting makes governance community-driven by encouraging people to attribute their voting power to others they trust, and it helps to avoid participation fatigue.
Potential delegates submit detailed statements on the forum and are chosen by the community. Members may then delegate their vote to the person they think best aligns with their vision for the DAO. Delegation ensures active governance participation by community members, but places the actual work of governance in the hands of delegates who have the time, attention, and interest to focus on steering the community’s decision-making processes.
Some major crypto players have applied to be delegates, including Brandon Curtis of Radar Relay, tridog of PleasrDAO, and ZrowGz, a tokenomist.
Voter delegation continues to gain recognition across the DAO ecosystem as a preferred method of voter organization and decision-making. With delegates keeping an eye on governance, the community can stay focused on building.
Tally is working to create a new model of product development. This new model is one in which organizations build products that are community-owned, but have public goods baked into their DNA. We live in a time where the tools we use are not limited by their direct utility — a wallet isn’t just a wallet when its use enables a host of public-goods initiatives along with real autonomy.
We don’t yet know what the Tally community will decide to do after the full wallet is released, the tokens are dropped, and the DAO is fully formed. What we do know is that whichever direction Tally chooses to take, it will be based upon the roadmap developed by its community. Building innovative consumer products that also fund the public good may become the go-to business model for Web3. If that’s the future we are voting for, it’s easy to see why many of us will choose to put a tally next to that box.
Hiro Kennelly is a writer and editor at BanklessDAO and the Editor-in-Chief at Good Morning News. He is also helping to build a grants-focused organization at DAOpunks.
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