Artificial Intelligence (AI) often sounds like something straight out of a science fiction movie—robots taking over the world or computers that think and act like humans. But the reality of AI is much different and far less scary. AI is already a significant part of our lives, helping us in ways we might not even realize.
Artificial Intelligence, Defined
At its core, Artificial Intelligence is simply the ability of a machine to perform tasks that would normally require human intelligence. These tasks can include things like understanding language, recognizing patterns and solving problems.
AI is just a tool designed to mimic certain aspects of human thinking or behavior. But it’s important to note that AI doesn’t have feelings, consciousness, or self-awareness. It’s just a set of algorithms—basically, step-by-step instructions for processing data and making decisions based on that data.
For example, when you use voice commands to ask your smartphone for the weather, AI is at work. It understands your question, searches for the information, and provides you with an answer—all in a matter of seconds. But it’s not “thinking” the way humans do; it’s following a programmed sequence of actions based on the input it receives from you… a thinking, creative human.
General vs. Narrow AI
Now that we know what AI is, it’s crucial to understand that there are two main types: General AI and Narrow AI.
It’s a little more complicated than just General and Narrow. If you want to dive deeper into the types of AI, check out this video from IBM.
Narrow AI
This is the type of AI we interact with daily. Narrow AI (often referred to as weak AI) is designed to perform a specific task or a set of related tasks. It’s very good at what it does, but it’s limited to that particular function. A facial recognition system can identify people in photos, but it can’t play chess or write a song.
These types of AI can seem deceptively intelligent, but that’s because it’s trained to be incredibly proficient at one thing. As humans, we tend to recognize someone who is really good at something as very capable. AI is not a human. Just because it’s impressively responsive as a chat bot doesn’t mean that it has real insight or understanding of anything it’s been trained on.
Search engine algorithms are a great example of this. Google seems like it knows everything about you sometimes. It places ads at the exact right time. Have you ever gotten an ad on YouTube for something that you were just thinking about but never voiced aloud? Spookily insightful, huh?
Only it’s not. Google’s algorithm has sampled terabytes of data on literally billions of people. It is excellent at seeing the patterns and knowing that if you searched for A and you purchased B, you’re likely going to think about C sometime in the next few days. This doesn’t mean it knows you, it just knows what humans are likely to do.
General AI
This is the kind of AI you see in movies — machines that can think, learn and apply knowledge across a wide range of tasks, just like a human. However, General AI (referred to as strong AI) doesn’t exist yet. While there’s some disagreement about how long, we’re still definitely a long way from creating a machine that can do everything a human can do.
To accomplish this, we’d need to make algorithms that can do everything the human brain can. The problem with that is that we don’t really understand how our brain does its thing entirely. Even if we can simulate the number of neurons and interconnections in a human brain (a BIG task), will that equate to learning, insight and creative thinking? Is a brain just a computer or something more is a question that science hasn’t come very close to answering.
Recent studies indicate that we may be even further from General AI than we thought. Some recent evidence suggests that human reasoning may actually be using an unprecedented macroscopic quantum system throughout our bodies, giving rise to what we think of as “consciousness”. If that or anything like it is the case, we’re orders of magnitude further from general AI that can compare to human intelligence than we thought we were.
Regarding GPT: Understanding Large Language Models
Let’s take a short digression to talk about one of the most ubiquitous forms of AI out there – the Large Language Model (LLM), used in programs such as GPT (Generative Pre-trained Transformer). Since these specialize in one of the cornerstones of civilization (communication), they’re easy to overestimate or misunderstand. After all, we typically see the ability to communicate well in humans as a sign of intelligence.
Large Language Models (LLMs) are a type of AI designed to understand and generate human-like text based on the input they receive. They are trained on vast amounts of text data, allowing them to learn patterns, grammar and even some aspects of reasoning. When you ask GPT a question or give it a prompt, it analyzes the input and generates a response that seems coherent and relevant, often mimicking human language quite convincingly.
How GPT Forms Responses
When you interact with GPT, you’re essentially giving it a prompt – a piece of text that it will use as a starting point to generate a response. GPT doesn’t “think” or “understand” the way humans do. Instead, it uses the patterns it has learned during training to predict what text is likely to come next based on the input it received.
If you ask GPT to write a story about a cat, it’ll use the knowledge it has about cats, stories and language structure to craft a response. The more detailed your prompt, the more focused and accurate its response will be. It isn’t actually composing a story… it’s just giving a response that sounds like something a human may say.
Limitations of LLMs
While LLMs like GPT are incredibly powerful, they have significant limitations:
Lack of understanding: LLMs do not possess true understanding or consciousness. They generate text based on patterns, not on any deeper comprehension of the world. This means that while GPT can produce text that seems intelligent, it doesn’t actually “know” anything in the way humans do.
Dependence on training data: LLMs are only as good as the data they’ve been trained on. If the data is biased or incomplete, the model’s responses may also be biased or inaccurate. Additionally, GPT cannot create entirely new knowledge; it only recombines and reinterprets what it has already been exposed to.
Inability to think critically: GPT and other LLMs cannot critically evaluate or verify information. They can sometimes generate responses that are factually incorrect or nonsensical, particularly if the prompt is ambiguous or outside the model’s training scope.
You can train a parrot to respond to specific phrases with almost conversational quips… that doesn’t mean the parrot is carrying on a conversation with you. LLMs are similar to that in lots of ways. The AI is learning what responses to a prompt are likely to be appropriate based on the data it is fed. It’s complex, but it’s still just parroting the data it’s been given.
Apocalypse, Not
One of the biggest myths about AI is that it will eventually become so intelligent that it will take over the world, causing an “AI apocalypse.” This idea is more fiction than fact.
Remember, Narrow AI is designed to do specific tasks. It can’t suddenly decide to become something else. Your AI-powered vacuum cleaner isn’t going to start plotting world domination… it’s just going to keep cleaning your floors. Even if we one day develop General AI, the idea that it would turn against us is highly speculative and far from a present concern. It’s also likely that generations of sci fi writers have been assigning scary, but fundamentally human characteristics to a theoretical, inhuman system.
In reality, AI is just another tool. As people understand more of this, another alarmist point of view has become prevalent – the idea that AI will replace all of us. Again, this goes a little far. There are parts of life that AI has already made more efficient, but it’s just a tool.
The invention of the power drill didn’t replace carpenters. Often human expertise is still required to get the best work out of these AIs. Writing from GPT will feel choppy and generic if it’s not edited by an expert. Images generated by non-artists from Midjourney often still lack the composition and cohesion that an artistic eye with experience can bring.
You could give me (a writer) a powerful data aggregation algorithm, and I would be totally lost and would probably just waste time on it. To a data analyst, it can be a super power for tedious and mundane tasks that previously sucked their time dry. The expertise from a real human is still required to get the best work out of AI.
Human Intelligence Boosted
Hopefully this DevSpeak gives you a lot more insight into the very broad term “AI”, and how it affects your daily life. New tech and the jargon that comes with it is often confusing, but that’s why you have DevSpeak!
This one was a mouthful for sure! Thanks for sticking with us through this deep dive on an important topic. We’ll be back soon with more explainers designed to buff your understanding of the tech world!
Stablecoins have emerged as an important part of the web3 world, playing a crucial role in providing financial stability to a typically volatile cryptocurrency market. For those new to blockchain and crypto, stablecoins might seem like a complex concept, but they’re actually quite simple.
Think of them as a “digital version of the dollar” or other traditional currencies, designed to maintain a steady value rather than fluctuating like Bitcoin or Ethereum. In this blog, we’ll break down the concept of stablecoins, why they exist, how they work and their importance in the growing web3 world.
What Are Stablecoins?
A stablecoin is a type of cryptocurrency that is pegged to the value of a stable asset, typically fiat currencies like the US dollar or Euro. Unlike Bitcoin, which can experience dramatic price swings, stablecoins aim to stay steady. It should be noted however that no financial asset is perfectly stable, but stablecoins are comparatively stable to most cryptocurrencies.
Imagine you’re traveling to a foreign country and you exchange your money for local currency. When you return home, you expect your leftover foreign currency to hold roughly the same value. This is the idea behind stablecoins—they are designed to ensure your digital assets don’t lose value overnight, especially in the often volatile cryptocurrency world.
Why Do Stablecoins Exist?
Cryptocurrency is known for its wild price swings. Bitcoin, for example, can rise or fall by thousands of dollars in just a day. While this can be exciting for traders, it’s risky for businesses and individuals looking for stability. Enter stablecoins—designed to minimize this volatility by pegging their value to more stable assets.
Here’s why stablecoins are essential:
1. Price Stability for Transactions:
In a world where cryptocurrencies are becoming more common as payment methods, having a stable unit of currency is vital. Imagine buying a coffee for $5 worth of Bitcoin in the morning, only for that Bitcoin to lose value by the time your payment processes. With stablecoins, the value of your purchase remains consistent, making them ideal for everyday transactions. Depending on many variables (complexity, blockchain, amount), web3 transactions can take time. Vendors must rely on knowing that the price paid for a product or service is consistent with their asking price, even if the purchase takes a variable amount of time to fulfill.
2. Cross-border Transactions:
Traditional banking systems often charge high fees for international transfers and can take days to process. Stablecoins make cross-border payments faster, cheaper and easier. Since stablecoins are based on blockchain technology, you can send money across the world in minutes without worrying about the value changing dramatically during the process.
3. DeFi (Decentralized Finance) Applications:
Stablecoins have become an integral part of the decentralized finance (DeFi) ecosystem, where people can lend, borrow and trade assets without relying on traditional banks. In these systems, having a stable currency to work with makes it easier to manage risks and avoid the extreme price swings common in other cryptocurrencies.
How Do Stablecoins Work?
There are a few different types of stablecoins, each using different methods to maintain their stable value. Here are the three main types:
1. Fiat-collateralized Stablecoins:
These stablecoins are backed by actual reserves of fiat currency (like US dollars) held in a bank. For every stablecoin issued, there’s an equivalent amount of fiat currency sitting in reserve. One of the most popular examples is Tether (USDT), which is pegged 1:1 to the US dollar. So, for every USDT in circulation, there should be a dollar in reserve.
Example: If you have 100 USDT, theoretically, the company behind it holds $100 in a bank somewhere to back up your digital assets and allow your tokens to maintain their precise value.
Instead of being backed by fiat money, these stablecoins are backed by other cryptocurrencies, often over-collateralized to account for the volatility of crypto. This means for every $1 of stablecoin, there might be $2 worth of cryptocurrency backing it. DAI, created by the MakerDAO platform, is a well-known example of a crypto-collateralized stablecoin.
Example: If you want to create $100 worth of DAI, you might have to lock up $200 worth of Ethereum. If the price of Ethereum falls, the system will liquidate your assets in order to keep the value stable.
These stablecoins are not backed by any collateral. Instead, they use algorithms to control their supply, automatically increasing or decreasing the number of tokens in circulation to maintain a stable value. When the demand for the stablecoin rises, the algorithm issues more coins to bring the price down. If demand falls, the supply is reduced to increase the price back to its pegged value.
Example: TerraUSD (UST) was one of the more well-known algorithmic stablecoins before it collapsed in 2022 due to its inability to maintain its peg to the US dollar, highlighting one of the most important risks associated with this type of stablecoin.
Stablecoins have become indispensable in the broader Web3 ecosystem because they serve as the bedrock for many financial activities on the blockchain. Here’s why:
Liquidity and Trading
Stablecoins are often used as a medium of exchange on decentralized exchanges (DEXs). Traders use stablecoins to quickly move in and out of more volatile cryptocurrencies like Bitcoin or Ethereum without needing to cash out into traditional fiat currencies.
Decentralized Finance (DeFi)
DeFi platforms rely heavily on stablecoins. Lenders and borrowers use stablecoins as collateral, ensuring that their loans or savings won’t lose value overnight due to market volatility.
Onboarding to Crypto
Stablecoins offer a familiar value system for people new to crypto. Instead of having to understand complex pricing of volatile assets, newcomers can start by using a digital currency that mirrors traditional money.
Safety from Market Crashes
During significant market downturns, investors often convert their holdings into stablecoins to protect their portfolios. This acts like a “safe haven” during turbulent times.
Popular Examples of Stablecoins
Let’s take a look at some of the most widely used stablecoins in the cryptocurrency space:
Tether (USDT): The largest and most popular stablecoin, pegged to the US dollar.
USD Coin (USDC): A highly regulated stablecoin backed by US dollar reserves, known for its transparency.
DAI: A decentralized stablecoin backed by crypto assets, primarily used in DeFi applications.
Because of their proven stability, both USDT and USDC are accepted as payment methods for many products sold in the Gala ecosystems. Additionally, payments are also accepted in both GUSDT and GUSDC, the GalaChain-bridged versions of these Ethereum-based stablecoins.
Each of these stablecoins offers unique benefits depending on the use case—whether it’s transparency, decentralization, or regulatory compliance.
Stablecoins are the unsung heroes of the cryptocurrency world, bringing much-needed stability to a notoriously volatile market. They are an essential bridge between the traditional financial system and the world of Web3, facilitating everything from day-to-day transactions to more complex decentralized financial activities. Whether you’re new to blockchain or a seasoned crypto trader, stablecoins play a pivotal role in making digital assets more accessible and usable.
Last week it was reported that OpenSea, the world’s leading NFT marketplace, received a Wells notice from the US Securities and Exchange Commission (SEC), leading to lots of noise in the crypto space.
What is a Wells Notice?
The name of this type of notice comes from the Wells Committee, a legal advisory group created by the SEC in 1972 to review the agency’s enforcement practices, named after the SEC general counsel at that time, John A. Wells.
A Wells notice is given to a person or company following a completed investigation. It is a formal notice used to inform the subject that infractions have been discovered by the SEC, giving the investigated company or person an opportunity to publicly address and respond to the investigation prior to any rulings that might follow.
While the SEC neither confirmed nor denied any such regulatory investigation of OpenSea, in the NFT platform’s August 28th response, it stated that the notice “indicates that the SEC is considering bringing a lawsuit against OpenSea.”
OpenSea’s Position
OpenSea has received a Wells notice from the SEC.
We're shocked that the SEC would make a move that threatens creators and artists, and we're ready to stand up and fight for our industry. https://t.co/7FyFH3NLdm
OpenSea has not wavered in its position that NFTs on its platform should not be regulated as securities. Openly taking a stand for the rights of creators, artists and innovators who use the OpenSea platform, CEO Devin Finzer has pledged $5M (in addition to its own defense) to assist with legal fees for any creators or developers who have also received a Wells notice related to their NFT activity.
“NFTs are fundamentally creative goods: art, collectibles, video game items, domain names, event tickets, and more. We should not regulate digital art in the same way we regulate collateralized debt obligations.”
“We hope that the SEC will reconsider its stance and approach this issue with the open-mindedness it deserves.” –Devin Finzer, OpenSea CEO
Ongoing Debate
The question of whether regulatory agencies would consider treating non-fungible tokens as securities has been looming over the web3 space for the last few years.
While the debate has attracted the attention of the wider crypto world and concern from NFT collectors, the consequences of classifying NFTs as securities under US law would fall primarily on the creators and sellers of NFTs.
The SEC’s mission is to protect investors by maintaining fair, orderly and efficient markets. If NFTs were considered securities, then those who purchased them would be considered “investors” – The SEC would then be obligated to protect them.
Previous Enforcement Actions
While this is the first Wells notice from the SEC to target an NFT marketplace, several exchange platforms have received Wells notices, including Coinbase, Kraken, Robinhood, and decentralized exchange protocol Uniswap.
The question of whether or not certain types of digital goods will be regulated as securities has been approaching for some time, and veterans of the space have seen it coming.
Looking Ahead
Like regulation of cryptocurrency, regulation of non-fungible tokens on some level is inevitable. The majority of web3 innovators welcome such regulation with openness and compliance, because it allows the clarity needed to create and effectively execute projects.
At Gala, we stand with OpenSea that NFTs are not securities and their owners are not investors. We are however fully committed to regulatory compliance as these questions are settled over the coming months and years.
Ultimately, coming regulations should be seen as a sign of web3 adoption and we look forward to a world where such issues are settled, where we can fully focus on the empowerment and progress made possible by blockchain technology.
There’s a lot of jargon in the tech world. Sometimes, you may understand these terms on their face, but their nuances in relation to technology takes a bit of deeper understanding. Luckily, DevSpeak is here to have your back.
You’ve probably frequently heard terms like “bandwidth,” “throughput,” and “network speed,” especially when discussing internet connections. But what do these terms really mean, and how do they impact your online experience? For those new to tech, understanding these concepts can be confusing. People regularly lament, “but I have a fast connection!”, in response to data speed problems… but the speed of your connection is only one factor in determining data transfer speed and efficiency.
In today’s DevSpeak, we’ll dive into these terms so you can confidently understand what each does and doesn’t mean. Use this knowledge wisely to understand your digital connections better… and to not put your foot in your mouth the next time you’re having a casual conversation with a developer.
Bandwidth, Throughput, and Network Speed, Defined
Let’s grab a very basic analogy here and hold it close as we explore these terms. Think of your internet connection as a highway. There’s lots of data packets trying to get through on the highway both ways.
Bandwidth: Think of this as the highway itself. Bandwidth is the total width of the road—the number of lanes available for cars (data) to travel on. The more lanes you have, the more cars can travel at the same time. In technical terms, bandwidth refers to the maximum amount of data that can be transmitted over a network in a given amount of time, usually measured in megabits per second (Mbps). Just because you have a solid maximum bandwidth, however, doesn’t mean you’ll always transmit data at those speeds… highways have other things that slow down traffic.
Throughput: Now, consider the traffic on the highway. Throughput is the number of cars that successfully reach their destination per unit of time. Even if you have a wide highway (high bandwidth), the actual traffic (throughput) might be lower due to various factors like road conditions or accidents. In network terms, throughput is the actual amount of data that gets successfully transmitted from one point to another over a given period of time.
Network Speed: Finally, network speed is the time it takes for a car to travel from point A to point B. It’s influenced by both bandwidth and throughput, but also by the car’s speed (latency). If the road is clear and cars are moving fast, data reaches its destination quickly. Network speed is often what people refer to when they talk about how “fast” their internet connection is, though it’s really a combination of several factors.
Different Metrics for Different Network Capabilities
These three terms — bandwidth, throughput, and network speed — each describe different aspects of your internet connection’s performance:
Bandwidth determines the potential maximum capacity of your connection. Think of it as the upper limit.
Throughput shows how much of that potential is being used effectively, giving you a realistic measure of your current connection.
Network speed impacts your experience of using the internet, like how fast pages load or how quickly you can stream videos.
To continue with our highway analogy, you could have a wide road (high bandwidth) but still experience slow traffic (low throughput) due to construction work or traffic jams. Similarly, even with good traffic flow (high throughput), if your cars (data packets) aren’t moving fast enough due to speed limits (latency), you’ll feel that your network is slow.
Let’s step outside of our analogy for a minute here. Keep in mind that data transfer is a 2-way issue. While you may be sending data packets efficiently and quickly, perhaps the other side of that connection is experiencing difficulties. Maybe a data center in between the two endpoints is congested. It’s a big internet, and it takes two to tango.
Not All Connection Problems Are Equal
Understanding these distinctions helps explain why sometimes your internet feels slow even if you have a high-speed plan. For instance:
Congestion: Just like rush hour on a highway, too many users online at the same time can lead to lower throughput, even if you have high bandwidth. Try connecting to two games, spinning up several YouTube videos and opening 42 tabs on Chrome to experience this limiting situation.
Latency: If your data takes a long time to travel across the network, it doesn’t matter how much bandwidth you have—your experience will still feel sluggish. Often this can be because of how far data is traveling, or how many stops in between. A ping test to the address you’re transmitting to can give you a good idea here. Ping is measured in ms, and tells you how long a signal takes to go to the other side and come back to you.
Packet Loss: Imagine some cars not reaching their destination at all due to accidents. In networking, this is called packet loss, and it can drastically reduce throughput. This one can be tougher to isolate into one experience… but trying to connect on bad wifi is usually a pretty good parallel. Try sitting with your laptop outside with a yard sprinkler between yourself and your wifi router. Those water droplets are each scattering part of your data stream, leading to lost packets that never make it to your laptop or to their destination.
When troubleshooting a slow internet connection, it’s important to consider all three factors—bandwidth, throughput, and network speed. The problem is usually a combination of them, but rarely in equal proportions. Deal with the biggest issue first, then reassess the situation.
Knowledge Transmitted
Understanding the differences between bandwidth, throughput, and network speed can help you make informed decisions about your internet service and troubleshoot connection issues more effectively. Remember, a wide highway (bandwidth) doesn’t always guarantee smooth traffic (throughput), and how fast you can get from point A to point B (network speed) depends on several factors working together. Once you grasp, you’ll be better equipped to navigate the digital highway with confidence.
Hopefully this DevSpeak showed you how to more confidently conversate about these networking topics and also gave you some practical knowledge about connection problems that we all face from time to time in our digital lives.
Even if you’re not the most techy person in the world, these are important concepts that everyone should know at least a little about. We’ll be back again soon with another DevSpeak to bring you more clarity to the confusing terms tossed around tech!
Imagine a company or an organization that instead of being controlled by a CEO or a board of directors, is run by the people who use its services or participate in its community. This is essentially what a DAO, or Decentralized Autonomous Organization, is.
In simpler terms, a DAO is like a cooperative business or club where everyone involved gets a say in how things are done. But instead of having meetings in person, all decisions and rules are managed online, using blockchain technology. This setup ensures that the organization is decentralized, meaning no single person or group has complete control.
It’s autonomous because it essentially operates itself according to rules encoded in smart contracts, which are self-executing pieces of code on a blockchain.
How Does a DAO Work?
DAOs work through a series of smart contracts, which are basically programs running on a blockchain. These contracts define the rules of the organization, automatically enforcing decisions made by the community. Here’s a breakdown:
Proposals: Any member of the DAO can propose changes, new projects or other decisions about current operations or the future of the DAO.
Voting: Members then vote on these proposals. In a truly decentralized system, each vote is weighted by how much stake (often in the form of tokens) each member holds.
Execution: Once a proposal is approved by the majority, the smart contract automatically executes the decision without need for any human intervention.
DAOs represent a shift from traditional hierarchical structures to more community-driven models. Here’s why they’re significant in the web3 world:
Decentralization: Power is distributed among all members instead of concentrated into a single centralized entity, reducing the risk of corruption or poor management. This distribution also reduces the consumer-to-business trust necessary for an effective organization. In fact, DAOs could almost alternately be called democratized autonomous organizations, but decentralization is a more apt description.
Transparency: Every decision and transaction is recorded on the blockchain, making the organization’s operations fully transparent. For centralized organizations to achieve this level of transparency, there must be a well established routine of sharing information with the users, such as the way publicly owned companies share quarterly financial reports or how a traditional non-profit organization’s financials are shared with its community.
Inclusivity: Anyone with internet access and the required tokens can participate, making DAOs more inclusive than traditional organizations. Because of their ability to essentially manage themselves, DAOs lend themselves well to greater specialization, allowing people to participate in governance in fields for which they are especially qualified, no matter where they live in the world.
Global Reach: DAOs can operate across borders, allowing global participation without the need for a centralized authority.
Examples of DAO Benefits
To make this concept more relatable, let’s consider a few scenarios:
Community-Driven Development
Imagine a group of indie game developers who come together to create a new game. Instead of going through a traditional publisher, they form a DAO. Players and fans can buy tokens to join the DAO and vote on game features, funding allocation, or marketing strategies. This way, the game evolves according to the community’s preferences, and profits are distributed among all contributors.
In this example, the use of a DAO not only covers the governance of their project, but also provides development funding through the sale of tokens.
Charitable Organizations
A charity could be run as a DAO, where donors get to vote on which causes should receive funding. Because all transactions are on the blockchain, donors can see exactly how their money is being used, ensuring transparency and trust. As a result of these benefits, more people could be inclined to donate.
Government Organizations
While the governments of the world are understandably hesitant to begin using a technology as new as blockchain, DAOs would serve well for many aspects of government operations. As traditional democratized voting processes become more corruptible, the security and transparency of DAOs could help protect voting rights and election sovereignty, aligning more closely with the will of the people.
While the Gala ecosystem doesn’t currently operate as an official DAO, it shares many of the principles that make DAOs powerful. At Gala, community input is highly valued, especially through platforms like Discord and Telegram, where feedback is actively monitored and considered in decision-making.
For instance, Gala’s Founder’s Nodes—a network of community-run nodes—play a crucial role in maintaining and securing the GalaChain, which is a key part of the Gala ecosystem. These nodes are operated by community members, and the decisions regarding the ecosystem’s future increasingly involve community voting and participation, which mirrors the decentralized governance seen in DAOs. Nearly all important decisions about $GALA tokenomics are presented to the Founder’s Node community for a governance vote before being put into practice.
Gala’s Path Toward Decentralization
Gala is not just stopping at community feedback. The long-term vision is to move toward greater decentralized autonomy, similar to what a DAO offers. This means that as GalaChain evolves, Gala wishes to see control over the ecosystem gradually shift more toward the community, aligning with the ultimate goal of decentralization.
Even if Founder’s Node operators do not technically represent a DAO themselves, the goal is to see GalaChain channel creators ultimately having the ability to create DAOs for their project, platform, service, etc. We are creating a secure and scalable web3 ecosystem built on a layer-1 blockchain with the power to host numerous community-created DAOs.
In summary, while Gala isn’t a DAO in the strictest sense today, it embodies many DAO principles and is progressing toward a future where the community could have even more say in the governance and direction of the ecosystem.
Thanks for reading our latest web3 explainer article! Hopefully you learned a little something!
This proposal outlines a new system of transaction fees for core Gala-operated channels. While the addition of a fee structure was inevitable, the GalaChain dev team has created a system that allows independent channel creators unparalleled autonomy and control while delivering lower fees than you’ll find almost anywhere else in the web3 world.
The proposed fees are substantially lower than the fees associated with almost any other blockchain. Still, the proposed system enhances the sustainability of the greater GalaChain ecosystem as it continues to grow, bolstering the economy and giving third party channel operators the freedom and control necessary to grow their own projects.
Transfer Fees
The cost of minting or transferring items on Ethereum varies depending on variables like network congestion, transactional volume and transaction type. While it may cost $2+ (in ETH) to transfer any quantity of a fungible token like $GALA, GalaChain’s initial fee structure would make such a transfer cost only 2-4 cents (depending on the current value of $GALA). We believe that a predictable and more steady transaction fee will be welcomed by the GalaChain community.
Batch Transactions, 1 Fee
On GalaChain, it’s possible to execute large actions with single transactions, such as mass batch minting of tokens. On GalaChain, tokens can be minted to hundreds or even thousands of recipients with a single batch transaction, requiring a fee of only 1 $GALA for the whole batch.
Basically, this fee system will have additional benefits to creators proportional to the finesse and efficiency with which they use the chain. The power of GalaChain can accomplish a lot with a single well-placed transaction, leaving Ethereum in the dust in terms of cost effectiveness for creators.
BatchMintToken Example
If the Ethereum gas fee for minting an NFT is $2, that fee is required for each token that is minted, so minting an NFT from the same batch to 200 different users would cost $400 in gas fees(roughly equivalent to 20,000 $GALA at current value).
On GalaChain, the BatchMintToken transaction would allow the creator to mint all 200 NFTs directly to their recipients for a single set fee (1 $GALA), using 1 transaction alone.
Fee Structure for Ecosystem Health
To address these challenges in a way that incentivizes node operators and channel founders, we propose the implementation of a new transaction fee structure specifically for the basic asset channel controlled by Gala. The proposed system does not extend to individual third-party channels.
Each third-party channel operator retains full autonomy to set and manage their own fee structures according to their unique needs and goals. The fees outlined in this document will not impact those independent channels in any way, allowing third-party operators to maintain their independence and flexibility over their own transaction fee models. This distinction ensures that while Gala implements a standardized fee approach for its own basic asset channels, it does not interfere with the diverse and customized economic models that third-party channel operators might choose to implement.
Proposal Overview
We propose the introduction of a fee system on GalaChain. This fee structure will apply to various transactions and actions within GalaChain’s basic asset channel. The primary objectives of this proposal are to ensure the sustainability of the Gala ecosystem, incentivize responsible usage of network resources, prevent spam and reward channel founders and node operators.
Proposal Details
GalaChain Token Transactions (Subject to Fees):
BatchFillTokenSwap
BatchMintToken
BurnTokens
FulfillMint
FulfillMintAllowance
MintToken
MintTokenWithAllowance
RequestTokenBridgeOut
RequestTokenSwap
TerminateTokenSwap
TransferToken
User Actions (1 $GALA Fee Per Action):
Minting currency from mint allowance
Minting NFTs from mint allowance
Bridging out currency (note: existing fees apply; future dynamic fees are in development)
Sending currency
Sending NFTs
Paying for orders by transferring funds
Paying for orders by burning funds
Ecosystem Benefits
Channel Founder Incentives: Founders of new GalaChain channels will be able to set fees for their own asset channels in the future, receiving a portion of fees collected within those channels.
Node Operator Incentives: A portion of transaction fees will be allocated to node operators, ensuring ongoing benefits for their crucial role in the decentralization and robustness of GalaChain.
Referral Incentive: As approved in a prior Founder’s Node vote, all $GALA burned as gas fees qualifies for a direct referral incentive reward. The direct referrer receives 8-10% of the burnt $GALA as a mint allowance, and the second-degree referrer receives 2%.
Prevention of Abuse: With a moderate fee system in place, abuse of GalaChain functions is actively discouraged. Most blockchain exploits and abuses are related to unreasonably high numbers of transactions, and per-transaction fees will de-incentivize these types of behaviors by potential abusers by increasing cost with transactional volume.*
*In THIS EXAMPLE, a game called Sunflower Farmer nearly “broke” the Polygon chain by monopolizing gas costs, causing transactional fees to drastically and suddenly increase. A system of set low fees will prevent this sort of exploit for a more stable blockchain ecosystem, and Gala will continue to update and tweak this system as needed for long term ecosystem health.
Implementation Plan
Upon approval of this proposal, the new transaction fee structure will be implemented immediately within the GalaChain basic asset channel.
The initial rollout will apply to transactions on the asset channel, eventually expanding to include owners of other channels in the Gala ecosystem, allowing them to create their own fee structures. Please note that external channel owners will have the ability to to set and control their own fees. More details about external channels will be provided with future updates.
Vote Details
Voting Period: 1 week
Approval Requirement: Simple majority (51%)
Eligibility: 1 vote per Founder’s Node
Vote Question
Should a new system of GalaChain transaction fees be implemented to support long term ecosystem health and user incentives?
Yes: I am in favor of the proposed fee structure.
No: I am not in favor of the currently proposed fee structure.
Abstain: I am neither in favor nor against this proposal.
Conclusion
This proposal aims to enhance the efficiency, security and sustainability of the Gala ecosystem through the introduction of a new transaction fee structure on GalaChain. We believe this change will contribute positively to the ecosystem’s long-term health while providing additional incentives for channel founders and node operators. We appreciate your participation and support in this governance vote as we continue to build a stronger, more resilient Gala ecosystem.
Thank you for your ongoing commitment to our shared vision.
