Exclusive Interview With OpenChat Co-founder Matthew Grogan

Matthew Grogan is the co-founder of OpenChat, one of the first end-to-end decentralized platforms in the world.

OpenChat boasts of the potential to upend social media networking. Besides, its leverage on the Internet computer blockchain makes it a fully decentralized, scalable, and secure platform for users.

Intrigued by how blockchain technology is capable of providing internet users with a greater level of security and full custody of their data, I sat down with Matthew to discuss OpenChat and decentralization.

Mr. Grogan, can you share your down-the-rabbit-hole story relating to blockchain?

I’m a software developer first and foremost and have kind of fallen into the crypto space and the role of entrepreneur.

I worked with Dominic Williams (the founder of DFINITY which builds the Internet Computer blockchain) as a developer from the late 90s and through the 2000s in a series of software ventures. We went our separate ways but about two and half years ago he asked if I would like to build dapps on the Internet Computer and I jumped at the chance. I first persuaded Hamish Peebles and, a few months later, Julian Jelfs to form a small company — incubated by DFINITY— and together, we built OpenChat.

Despite having only been in the crypto space for a relatively short length of time, I’ve embraced the ethos of decentralization and trustlessness and I'm excited to be a part of the movement.

Decentralization is upending the internet. Can you go back in time to how we go to this stage?

In the early days of the Internet, it was primarily used as a means of communication between centralized entities such as governments, corporations, and individuals. However, as the internet evolved, so did the desire for more decentralized and democratized forms of communication and interaction.

This led to the creation of various decentralized technologies such as peer-to-peer file sharing, distributed computing, and ultimately, blockchain technology.

These technologies enable individuals and communities to interact and transact with each other in a trustless and decentralized manner, removing the need for intermediaries and centralized authorities.

The Internet Computer was so named because it builds on the decentralized Internet with a decentralized blockchain-based compute platform that can host dapps and services end to end.

Can you tell us about the founding of OpenChat? What is the inspiration behind it?

We were given the opportunity to build a dapp that showcases the Internet Computer and quickly settled on an instant messaging app. The inspiration has been to build a fully functional chat app that is open to anyone, anywhere in the world, is highly secure, not controlled by any central organization, and runs only verifiable open-source code.

I think OpenChat is arguably the world's first decentralized end-to-end messaging platform, what are the challenges it's solving?

I don't think OpenChat can claim to be the first decentralized end-to-end messaging platform but I can explain the challenges it is solving. As a starting point, OpenChat is a highly functional, performant chat app on par with familiar web2 messaging apps. It removes the need for centralized intermediaries and enables direct peer-to-peer transactions of various cryptocurrencies, making it easier and more efficient for users to transact with each other.

Its decentralized governance model ensures that users have a say in how the platform is run and evolves over time, rather than being at the mercy of centralized authorities. User data is kept secure and private in canister smart contracts which run transparent and verifiable source code.

Let's talk about the recent Arbitrum fiasco. You saw how the lack of a DAO management structure can lead to a crisis. Could it have been avoided?

I’m not particularly familiar with the Arbitrum story but as I understand the founding team were able to transfer a very large sum of tokens to a special treasury account to fund a massive airdrop without needing the authority of the Arbitrum DAO.

In the case of OpenChat, the DAO was created automatically at the conclusion of a public decentralization swap which provided the DAO with a treasury of ICP tokens in exchange for CHAT tokens. At no time did the founding team have access to the treasury.

The only way a transfer of tokens from the treasury can happen is by a majority vote of the DAO on a specific proposal which when adopted automatically executes the specified transfer. In the near future this will actually require a supermajority (66%) making it even more unlikely that a governance attack could expose the treasury.

OpenChat prides itself on being able to achieve a high level of decentralization. Can you tell us the instances where it played a role?

This blog post explains how OpenChat governance works. In a nutshell, users can stake their CHAT tokens as Neurons which can be "time-locked" to gain voting power and are used to vote on proposals submitted to the SNS DAO. Neurons can be made to follow each other in various ways such that they vote automatically, representing a form of liquid democracy.

If you look at the OpenChat Proposals group you can see all the proposals that have been made since the OpenChat SNS DAO launch. As would be expected most of the proposals have been made by the founding dev team because our whole focus and purpose is to build and evolve OpenChat. Here is a list of proposals submitted by the community that have been adopted.

• Adding CHAT and ICP to the CHAT/ICP pools on two decentralized exchanges, ICPSwap and InfinitySwap, to enhance the liquidity of CHAT.

  
  

• Integrating ChatGPT function within the OpenChat Platform.

  
  

• Creating a 'Diamond Membership' (Lifetime Edition) for users who prefer to pay for membership in a lump sum rather than via a subscription.

What, in your view, is the biggest challenge facing the DAO governance model?

I believe that one of the biggest challenges facing the DAO governance model is ensuring that it remains truly decentralized and democratic.

While DAOs hold great potential for enabling collective decision-making and empowering communities, they also face a number of potential pitfalls. For example, there is the risk that power could become concentrated in the hands of a small group of influential members, or that malicious actors could attempt to hijack the platform and manipulate the decision-making process.

To address these challenges, it is essential to ensure that DAOs are designed in a way that truly enables broad-based participation and democratic decision-making. This can be achieved through a variety of mechanisms, such as ensuring that voting power is distributed equitably among members, implementing transparent decision-making processes, and building in safeguards to prevent collusion or manipulation.

The SNS system which enables the OpenChat DAO is very advanced.

• Other than “motion” proposals that express the wishes of the DAO, all other proposals are executable which means their adoption triggers a particular action specified in a smart contract. This includes actually updating the code running the OpenChat dapp.

• Token holders can choose to vote themselves on any given proposal or follow others on particular types of proposals, providing a sophisticated blend of direct and representative democracy.

• Voting power is a product of the value of stake and how long it is staked for. Token holders are rewarded for taking part in governance in proportion to their voting power which encourages participation and taking a long term.

However, there are areas for improvement. As it stands, the greater your stake, the greater your voting power which could lead to too much power in the hands of too few. There are plans by DFINITY (which develops the SNS) to level the voting power so that it is closer to one person, one vote, but first, proof of unique personhood is required; otherwise, this could be gamed by simply having lots of small neurons.

With Whatsapp being the closest comparison to OpenChat, do you see the latter outperforming the former?

I wouldn't say WhatsApp is the closest product to OpenChat. Right now we are more like Telegram with a combination of private chats and public groups. But soon we are introducing communities that are like Discord servers or Slack workspaces. These have use cases and revenue models which can work on a smaller scale.

However, we do have a strategy for massively growing OpenChat. We need to work through our roadmap to continually improve the functionality and unique features. But on top of that, the secret sauce is tokenization. We can directly incentivize user growth and participation with algorithmic token rewards and can also build an army of user advocates with a long-term stake in the success of OpenChat. This is not really possible in the same way for web2 apps and services and will enable viral growth loops and network effects to drive adoption.

What else makes OpenChat unique and groundbreaking?

We have covered the most significant areas but amongst the smaller features coming soon are “Verified NFT avatars” and “NFT gated groups and communities” which are greatly desired by our users.

In general terms tokenization allows the system to make micro-payments which are not possible in the web2 world or for most blockchains with much higher transaction fees. This allows users to pay for premium features or content on a pay-as-you-go rather than subscription basis which is appealing as it requires no upfront financial commitment. Users can also tip other users a small amount for posts they value.

Any parting words?

I invite your readers to try OpenChat for themselves! It is a responsive web app that works across all devices. If you use it on your phone, then add it to your home screen for a native app-like experience with push notifications.