Welcome. This is the Jenkins user experience special interest group. It's January 4th, 2023. Happy New Year. Topics that I've got on the agenda. Security reviews for UX poll requests. User feature flag status report. I don't know without Vodak here if we'll actually do that one. I'm going to move it to the end in case Vodak doesn't make it. Yahoo UI removal. Tim, is it okay if that one's on the list or would is there anything you want to put there? Nothing to add. Okay. All right, so take that one off. Feedback on UI on UI UX regressions was a topic last month so I brought it forward. Keyboard usability was a topic last month but I wasn't sure if there was anything we needed there. And then I assume what's next in UI and maybe we should have should we have a topic that is what's happened recently in UI. Because we got a bunch of interesting poll requests merged in the most recent weekly. Any other topics that you want on the agenda? Okay, then let's go ahead and get started. Are these topics okay? Are they any that you would recommend someone wants to recommend? Hey, drop that topic from the list. Okay, then let's start with the list. So security reviews for UX poll requests. Tim, this has been an ongoing question we ask each month as we meet. How is it going? Is it working? Do you have any insights you want to share there? I think it's going okay at the moment. There's just one waiting review at the moment. Only one that is a waiting review. Okay, good. So the security team is keeping up and it's not, there's not a large backlog, particularly with the end of year holidays. Having one sitting in review is not terribly surprising. Okay, good. Anything else on that topic? Okay, then let's go on to the next. How to collect general feedback on UI and UX regressions in the last session. The discussion had been around. Let's see where was it. Maybe I'm off base and even creating the issue. Oh yes. The question was JIRA issues, new issues with appropriate labels and cleaning up old issues. Any comments from those in the in the session about about the topic is we're currently using the regression tag or regression label to flag all regressions right so whether they're UX or not. The only issue that I've seen has been adding the regression label before something has been triaged. So the most efficient process that I've seen has been to, if you're reporting a regression to also triage it at the same time and find the original commit that introduced the regression. And also to comment on the original change. So that kind of starts the process of discussion and resolution as quickly as possible. But when that isn't, when the original changes and known, there's some work to be done to discover it. And so the, I think what I've been doing is using the untriaged label the UX untriaged label to indicate, you know, hey, there's more bisection that we need to do before we can identify which change caused the regression. And, and are you finding that's working I'm a little worried that the UX untriaged label may have quite a queue. Certainly, if the submitter does the bisect, I can see why that's the most efficient that then lets others immediately say oh, what shall we do about this. Whereas if somebody else has to bisect it's there's real work to do the bisect. Yeah, there's real work either way. So, it's just a matter of finding the time to do it, but it's it's important to be it's important work to do. Okay. Any other any other I'm not sure what more to go with there will continue it sounds like we'll continue using the UX untriaged label will continue encouraging submitters to do the bisect themselves. So that we identify which exact commit. I guess the other is we continue encouraging people to use small commits, so that the target of a bisect is is a relatively narrow scope change that if it had to be reverted could be reverted without major damage to other things. I thought back I had offered to provide help with people who are interested in learning how to do by section more efficiently. So over the last few months I've come up with a process that works pretty well for me at least. For example, you know I skip compiling the tests because you don't need to run any tests when you're bisecting so I figured out kind of how to make that feedback loop as tight as possible. So if there are, if there are people that are struggling with, you know, learning how to do that I can definitely help people out. I think that would be a good thing for the docs, Kevin, Kevin, I wonder if, Basel do you think that's something if you and I did a session or you and I and Kevin did a session. We might consider asking Kevin to do some writing to describe the process and put it in the developer section. That could work. I'd be more than happy to work on something like that that sounds like a great addition or that something that would be really useful going forward so. All right, thanks. Okay. Anything else on the general feedback on UI and UX regressions. Okay, next topic then was keyboard usability and I think this was Christina, and Christina is not with us today so I'm prone to move this to the end of the list are there any others who had topics on keyboard usability that they wanted to discuss. Okay, so I'm going to take that out of the list then. Next topic then was what's happening recent what's happened recently in UI improvements. And here the thoughts that I had where we could look at the, the most recent change log from Jenkins.io and see quite a number of places where where there have been improvements added. Are there any things Tim that you would like to highlight. Do you want to show your ones first. Well yours are more truthfully yours are more valuable if you've got anything you would like to share I would rather go to yours first mine are just looking sort of at the history. Yep. Let me just check weekly. There's some plugin updates. Looks like someone's been too quick updating plugins. Just give me one six if I've got. No, I don't have it quite ready.   Okay, so. I need to allow zoom to get to my screen, which probably means after rejoin. Okay. Okay, can you see weekly.ci that you can start. Yes. Cool, so. Okay, so a few things when the last couple of releases. One of them is that console log and a few other pages have now got a read crumb. So it goes all the way over to console output rather than finishing here. So it's over a number of pages. But that's kind of a prominent one to show. The advanced button has had a facelift. So you first show. See I do you can say. So this is on the LTS version. It's only advanced here. I just create a dummy freestyle and delete it. Okay, so here you got this advanced button here with the dot dot dots. And if you'd modified a field and then saved it and then reloaded it, you'd also get a little. Okay, in some cases, you get an icon next to it that showed that's the fields inside have been modified. So in here, just to show them. It's changed from advanced dot dot dots to advanced with a little arrow, which changes depending on what state it's set. And then there's a little icon that goes next to it when you've modified the value says edited here. The total tip. Nice. So now I can I can go. I can hide advanced again. I can hide advanced whereas before I had no way to hide it except to save the page and return. Yep. Yeah, exactly. And then the button will stick around and then you can hide and reopen file upload has has been styled. So rather than the default browser styling, there's now a style to look like a rest of our buttons. And there's a new jelly component as well to wrap that up. Management links have now had badge items icon support added. So if you have any plugins, if someone hadn't been so quick updating plugins, there'd be a little badge here showing telling you how many. Sorry, does anyone on that one might not be merged yet. I think they want still open. Yeah, okay, yes, one of them still open. So it's not managed not on the badge. So on the management links page badges now a component previously it was added. definition just for managed plugins. Now it's a component extensible component that anyone can use on the managed Jenkins page. So it's currently used for managed plugins and for manage old data. There will be a count up here and a tooltip. And there's a request which also adds it to the managed plugins page on the right here with accounts showing how many available plugin updates and also makes badges available in the context menu. And so it's not just in the plugin manager it's a it's part of our task so anyone using our task can also add a badge as well. So, so on this page for instance would it be within your, your idea of how things should be if the installed plugins had a badge that said how many plugins were installed or how are there some things you can highlight of ways. We should be considering using these badges to make the experience better. Yeah, some guidelines in here. So, yeah, don't overwhelm it just use it where it makes sense. So wouldn't put badges on everything, but just say like, if you've got an admin mantra up here there's already an example of a badge like concept, which shows you like a notification count. So, so it would probably not be wise that implied labels plug in puts up the count of label implications that have been defined that's not actually that helpful. This should be things that are that are quite valuable to the user before we put them on a badge. Yeah, there's a in the prototype there's a few examples and of some badges as well on the builds card. So here's like a kind of different sort of badge concept but kind of shows where the pushes came from so just the shows that it was a push from GitHub. Whereas this was a build triggered by myself. Yes, that's a different sort of concepts. Not sure if there's any others. No, I think that's the, that's the only one. Apart from that, there's a couple of bugs fixed. When you apply changes no longer prompts you saying, are you sure because you've already saved it. And we've reverted the label destructive buttons dismiss as the with the current button design the admin the admin monitor contrast just couldn't really work with with the buttons needs a some sort of tweaks or button changes. But there's no there's no small fix that we could see previously just a couple of minor fixes that have been open for a while we when you collect collapse the build queue so build executed widgets. It was this was completely misaligned so just such a recent bug fix it used to touch the side probably still does on CI if you collapse this pain here. So just touching the edge so the recent but recent bug fix fix that. I think that's about all that's came in recently was two weeks ago. There's now symbol AP symbol Java API for declaring symbols for using symbols and Java code. So I think really is using that in his plugins. So you probably saw here that I was using. Well in the design library you would have seen that I was using the search bar component. It's very nice just when you come in here so files not in there yet but so there's there's now a search component that you can use and sports icons as well. To rather than scrolling all the way to the bottom of the page. I think it auto focuses as well so soon as you arrive on here is tight validation. So that's a new component which is also being used on the managed Jenkins page. It's registered on this keyboard shortcut so you can just type log and go to that page. Okay so the that that search I had not experimented with yet the search on the manage Jenkins page is looking at all the things in that context. So if you type load statistics it would write okay so it chooses those items. Yeah, yeah. Nice very nice. Yeah, and there's also possible improvement for later is maybe drop some of these configure words as well as we noticed when developing this is a lot of configure. And I could probably just be changed to system tall global security credential providers. Look at that later. I think so that's just going back through the last few weeks releases. The typical request was finally merged. I don't know if we mentioned that in the last one, but so it's no longer using the. I think it was probably Yahoo UI. It was. Yeah, so so the tipi murder the tipi JS replacement of Yahoo UI for tool tips right. Yeah. Yeah, so that's been merged to choosing to be everywhere. Just quite nice bit of placement. And there's an API in that as well so you can, there's a couple of knobs that you can tweak as well if you want to have like an interactable menu so you've got the warnings. So if you had any of these that had any coverage, maybe in core. I don't know if this uses a there we go back on page. Let's go to know. This one here. So you. So this is a widget that was in G users. So this is LCS farm. See when I hover over this doesn't just straight away disappear. So that's what's known as interactable. So you can. You can set the interactable element if you want to better hover over text without disappearing. It's like a data data actually you can see it. Yeah, so I think that's about it unless anyone remembers anything else. Great results. Amazing. So the breadcrumbs the breadcrumbs changes were one that that came that just arrived in 385 where a number of places that didn't have breadcrumbs before now have them. Yeah, yeah. And also. Yeah, so there was a while back but in to dot. Yeah, 2.375 the breadcrumbs were reworked into more modern ones. And a couple of releases ago we restored highlighting the last breadcrumb, because it was missing and quite a lot of places in the API is not the best. But in to dot 385. Yeah, a whole bunch more places I've got breadcrumbs added to configuration page Aaron. Thanks Tim. Thanks very much. So any other topics that people want to want to highlight on on the what's arrived recently in UX improvements. I could look at the I could show the change log if that will help. I'm not sure that it tells us anything more than what Tim has already shown us. We did get I guess HTML syntax is now available for node descriptions. And there's a hide values and tables edition that was added that's part of the user experience. Oh, so I mean to show that. Did you want to show that Mark or no if you if you want to show it I would I would certainly prefer it if you show it it's much, much more effective when you show it than when I show it. Yeah, so I missed that one. Cool. So yeah. So a new change new kind of security enhancement change was released in the last release. It's not a security fix as such but it's kind of just nice to have which helps prevent shoulder surfing and or even just if you're sharing a screen and possibly putting something into a video or whatnot and you want all these values to show up. So you can click so all system properties and environment values are hidden by default. The other thing actually mentioned before is the system information pages now in tabs rather than rather than one huge page would normally scroll quite long. But here it's just, it's been tabbed. You can click these to show them click them to hide them and then you can copy them just fine as well. And if you're copying text it won't change. I won't click show hide here because I don't know what's here. Yeah, so you can you can show and show and hide all or reveal individual values looks fairly safe but I'm not going to click it on video. So, so that that transition to tabs also happened in 385 or or. Yeah, I think it was 385. Good. The other thing I was going to add is, yeah, I managed so I managed to close down a lot of requests over the New Year's break. We were at about, I think 35 open web UI pool requests. And we're now down to 19 with, I think, I think, I think 16 of those are ready. Yeah, 16 of those are ready PRs. I think less. Yeah, so 16 of those are ready, ready PRs and three of them are in draft. Thank you. Thank you for that. Nice, nice merge. Thanks very much for so many. That's great. Any other topics that we should highlight. I was just saying most of the remaining ones have issues that need fixes is probably only three or four of them that are ready in the current state that with minus changes. Great. Thank you. The next topic was what's coming in UI improvements Tim that's a that's a common place we've looked to you are there any things you would like to share or highlight. Hey things that are in progress I've seen more progress and in Yahoo UI removal if I understood correctly. So the next one is the changing the changing some of the context menus to use tippy instead of Yahoo UI. So that's that's the one that's waiting on security review at the moment. I think that one is going pretty smoothly. I don't think I have. Yeah, so yeah, exceptions test is passing on alternate. It all looks all looks good. The only issues we found last week was some keyboard issues which were fixed for accessibility. Great. So yeah, just waiting on security review and then you'll be able to replace that I don't think it's all of the context menus. The button drop downs haven't been changed in some places, but it's just keeping it as a smaller simple PR. But it looks quite nice. You can the screenshots on. I'll send a link if you want to open it. Oh, great. Thank you. Yes. Okay, so here. Nice. These are these are the screenshots that Jan has placed here are using tippy not using Yahoo UI to do the do the work. Yeah. Yeah. Thank you so much. That's looks looks marvelous. Thank you. So this is one need security review. Great. Thank you. Other items you wanted to highlight I noted that you went to and it looks like the site is still running the prototype site you'd use to show show possible vision for the next next for a future Jenkins UI. Would you be okay if I embedded that URL here or maybe you could share the URL or is it something you're, you're not really ready for a people to look at and think about what's the future, what might the future be. Yeah, it's fine. The links been posted and get her in. Oh, it has. Okay, good. All right. Anything else you wanted to highlight on what's coming in UI improvements. No, not at the moment. So I've been seeing pipeline graph view improvements arriving that seem seem to be steadily making progress. Anything that you wanted to share there. Yeah, so I think it's a whole bunch on that month so ago so in November quite a lot of work was done. Improving that. I'm not sure. See it probably works on CI. You can start. I'll just check the base version. Yep. Yeah, so I don't think I should have all that. Yeah, I've, I confess I've turned off blue ocean. I'm not using blue ocean anymore I'm just using pipeline graph you on my CI instance and I'm thrilled with it it's working very well. Yeah, I can show that quickly. Okay. Yeah, see this is on CI. There was quite a lot of fixes done to the, what the algorithm was reworked. So it works a lot more like blue ocean so most cases I think we may be seeing a different screen share I'm seeing get a GitHub page. Yeah, that crew Google Chrome window. Got it. Now it's now it's pipeline graph you. So yeah the algorithms been fixed up so it's very very limited cases that don't work. It's mostly matrix these sort of things I think and quite weird cases but yeah in general it works fine. Pulled in the card design from the prototype. So so there's a couple of cards and then you can expand it. And using Iona cons and keyboard and everything to expand and so integrates here with GitHub projects and just pulls in some information from the details card. Yeah, I love that details card because on a pull request it shows me the pull request title. It's amazing how helpful that is for me when oh what what what was the 4891 or 595597 gives me no information it doesn't give me nearly enough information whereas pipeline graph you showing me that in the in the tab, or on that card. Select builds by display name that Matt that means something to me. Yeah, so you've got repo, probably not too relevant in this case branch PR commit. And then when it started time has been in queue and how long the build took. So thank you this is showing one of the cases where it doesn't quite work. So what's going on there. And so that was that card there and there's also some buttons here, you can rebuild and then for I think simple pipelines, you can also go to the configuration page. And this is a quite a lot of work and styling done so no longer overflows using kind of a cleaner design highlights highlights the active step. And then you've got some you've got some step information here as well. If anything failed in a build it should. So you can go to overall stage as well and get stage information. And in the stage information, there'll be a link to any failed steps. So you click the link to get any failed steps. And there's an algorithm based on pollution as well to automatically open the open the failed step if anything failed. Along with being able to rebuild from this page without leaving and going to a different page. I think there's a little bit of so also that got rebranded from like pipeline graph view to being called like as a pipeline graph and pipeline console and they've got new icons. And from the job page it's called stages. And a little bit of work. I think maybe a little bit of cleanup was done here and there's a PR that I haven't finished. Which reworks that page to use card layout as well. I'm not sure how far along I got on it. So would we work the stages page to use card layout. Nice. Yeah, I think I think so it was just to bring in more information so you can have a details card on that page. And then you could expand it. Right and was this page here just continuously polls currently. I just turned off because I didn't have time to implement it but it was pretty annoying. And this is so this is this goes to a different page. It doesn't pop out a model. So then you get a full page view of it. So I think it was I think the reason I didn't merge it was I wanted to add a bit more to this page. Like a details card or something. But that's not sure it didn't. Maybe I just wanted to review. I don't know. It was a while ago. Get back to it at some point. Cool. That's all those. Thanks Tim. Thanks very much. So those were the all the topics we had for today. Unless somebody's arrived who wants to talk to feature flag status or a keyboard usability or other topics are there other topics to be brought up. I'll go ahead and stop the recording. Thanks very much everyone for being here. The recording will be posted within the next 24 hours. Thanks a bunch.


Hello and welcome to the session. In this session we discussed the following question which says, simplify the expression cot inverse of 1 upon square root of x square minus 1. Let's proceed with the solution now. We need to simplify the expression cot inverse of 1 upon square root of x square minus 1. So here first of all we take left x v equal to sec theta. Therefore the given expression that is cot inverse of 1 upon square root of x square minus 1 is equal to cot inverse 1 upon square root of, in place of x we put sec theta. So this would be square root of sec square theta minus 1. Now since we know that sec square theta is equal to 1 plus tan square theta. So this means that sec square theta minus 1 is equal to tan square theta. So this expression would be equal to cot inverse of 1 upon square root of tan square theta. That is in place of sec square theta minus 1 we put tan square theta. And so this is equal to cot inverse of 1 upon tan theta. Or this is equal to cot inverse of cot theta as we know that cot theta is equal to 1 upon tan theta. And so this is equal to theta. Since we have taken x to be equal to sec theta. So this implies that theta is equal to sec inverse x. And so this is equal to sec inverse x. So I am simplifying the expression cot inverse of 1 upon square root of x square minus 1 we get sec inverse x. So this is our final answer. This completes the session. Hope you have understood the solution of this question.


Okay, so let's try this one now. It says calculate the hydroxide ion concentration of a solution with a pH of 4.0. Okay, so we're looking for the hydroxide ion concentration, but pH gives us the hydronium ion concentration or the proton concentration, right? So there is something else we know, though. We know kW. kW is the concentration of H plus or H 3 O plus times the concentration of OH minus. And we also know that kW is a value of 1.0 times 10 to the negative 14. So with that information, we should be able to rearrange this to, after figuring out this, being able to plug that number into here. Okay, so let's figure out what the hydrogen ion concentration is first. Okay, so how do we do that? Well, the same way we did it the last problem, right? So it's going to be 10 to the negative pH equals the H 3 O plus concentration, is that right? So in this case, why don't we just add a zero there? So we can have two sigthins. So, well, we don't need to do that. I don't need to do that. What is the answer there? 1.0. Tell me how, guys. Thanks. 10 to the negative 4. What? I'm all right. Okay, so if it's right on the dot, it's always going to be that to the negative 4 or whatever. So that's the hydronium ion concentration, but we're looking for the hydroxide ion concentration. We know KW, we know hydronium ion, so the hydroxide ion concentration, we just divide both sides by H 3 O plus, right? So we're going to get KW divided by H 3 O plus concentration. Do we know both of these numbers? Are you excited that we're going to get KW divided by the negative 4? Do you guys remember how to do that? Yeah. So again, you don't have to, right? Put these all into your calculator if you remember your law rules, right? So if it's negative on the bottom, you're just going to bring it up to the top and add it. So it's going to be, what did you guys say? 1.0 to the time it stands to the negative 10 mole. So this is a negative on the bottom, so if you do that, you bring it up to the top and put a plus. So if you do minus 14 plus 4, it's going to be negative. If they were together, if they were both on top, then you would add them together. Does that make sense? Okay. So again, there's that sheet that I printed out for you guys, the law rules, okay? It makes things real easy on you if they're, especially if they're just 1.0 times whatever, you know? Because they're straight up, you can move them around. It's real easy. Okay, is everybody cool with this? Any questions?


The Galerys who turned out to welcome international golf back to the Hong Kong golf club after an absence of three years certainly enjoyed seeing Hong Kong players making an impact today amongst them Terence own this at the 9th beautifully hold and a round of 70 left him an even par making the cut right on the number Now Tong Li was less lucky. He would miss the cut after his 78 But he did have one huge stroke of luck. Oh so on the 9th Wade Ormsby twice a Hong Kong open champion on this golf course was struggling a little when he took 37 to the turn But he birdied 10, 11, 12 and here at 13 to make the cut with a little despair Ian Polter had to work hard today. This was one of only two birdies he made And he too would make the cut right on the line at even par Patrick Stenson played some lovely golf tee degree and he just simply couldn't hold enough parts This at the 11th Setting up one of only two birdies on the card Different story from Michael Henry the New Zealander Wonderful 64 joint best of the day this at the 15th a birdie And he's on eight on the bar in third place at the halfway stage Miguel tabuena led after round one and was top of the leaderboard for a while today after a 67 on 10 under He's looking good for a second winner row after his triumph in Delhi last week But top of the leaderboard is the man who just this week became an ambassador for Hong Kong golf club rookie pro Taiichi cool 64 yesterday he added a second 64 today with the help of this birdie Terrific goal from Taiichi cool at 12 on the park. He leads by two


Live from Orlando, Florida, it's theCUBE. Covering Grace Hopper Celebration of Women in Computing, brought to you by SiliconANGLE Media. Welcome back to theCUBE's coverage of the Grace Hopper Conference. I'm your host, Rebecca Knight. We are joined by Rory Budnick. She is the engineering manager at Procore. Thanks so much for joining us. Thanks for having me. So tell our viewers a little bit more about Procore. Sure, so we make cloud-based construction project management software. So what that means is everything in your construction project can be stored in Procore. Everything from the budget for the projects to the drawings that your subcontractors need to see on the job site. And so these are two, it's mixing construction and engineering, two very male-dominated fields, all in one. So talk a little bit about what your experience at Procore has been so far in your career. Sure, so I joined Procore when there were 150 people, which was a little over three years ago. And now there are over 1,000. We're in international markets. It's a whole different ballgame. It's been an awesome experience. I feel like I've gotten to grow with the company. I started out as an individual contributor, and now I'm a manager. I've been involved in a lot of hiring at Procore. And so we talk about two things here at Grace Hopper in terms of getting more women in tech, more female software engineers. One, I would say is the pipeline. And two, being retention. So in terms of the pipeline, being in hiring is important, right? Being here, having a Procore booth, making sure that we are having our recruiters talk to female software engineers in the first place. And in terms of retention, Procore has been just a really supportive place to work.   Yeah, it's one of the many perks. I mean, it's just a comfortable office space where we're making diversity a priority and realizing that our employees need to be happy to get the best work done. It's definitely the most supportive company I've ever worked at in that respect. Now research shows that women engineers really go into this field because they like to solve real world problems. So can you talk a little bit about the kind of technology challenges that engineers face at Procore? Sure, that's one of the things I love about Procore is that we work on really tangible problems. So, and you see the payoff, you hear directly from the customers. So like, I work on the drawings team. Drawings is one of our flagship tools. People upload all their drawings for a project and we make sure that people are always working off the current set, which is really important. So that you don't have to do any rework and you stay on budget and on time. And these are the headaches of any major home project too, is the fact that the timeline always slips and the budget always balloons. Yes, whether it's a home project or it's LaGuardia Airport, which is one of the projects that's in Procore, it's the same problems. So we get to work on things like making sure that clients are working off of that current set. What's the best way to do that? We hear there are real world problems, like different ways to keep track of drawing revisions and we make sure that we adjust for whatever their method is of doing that. The biggest thing that we're working on right now technically is scaling, which is an exciting problem. We're working a lot on performance. We have about two million users. So it's sort of like the best problem to have where we have such high demand that now we need to meet it. So a lot of the real world problems that we're solving, we have pretty solid solutions in place. We just need to scale to meet that demand. And as you said, the company is growing so much. So how are you making sure that it stays and remains that comfortable place to work as it gets bigger? That has been very interesting to watch. It's just been a great professional development experience for me as a growing manager. And I think that the key thing we're doing is in hiring, we look through three qualities. And they are ownership, optimism, and openness. They all start with O so it's easy to remember. But we really do look for those qualities in people and find people that demonstrate that ownership, want to run with a project, feel like they're showing that they put their self-worth in the project. And so they're willing to go the extra mile. In terms of optimism, doing well with change. I mean, growing that quickly, we're looking for people who work well with change are excited about our growth. Or adaptable. Exactly. And then... Openness. Openness. I almost forgot the last one. Openness, for me, where I see that the most at ProCore is just communication from the executives. That no matter who you are, you could go up to one of them and start a conversation and they make a point of doing all hands meetings where they're communicating what the top company priorities are, what our investors are saying, things that you wouldn't think that an individual contributor would even be aware of, they lay it all out there. So, I mean, it sounds great, the idea that the lowest person on the totem pole can go up to a senior manager and give her input on a new idea or pitch something. How does it really work though? I mean, how do you empower that junior employee? I mean, I think a lot of that's individual management. But then an example I can think of in terms of empowering individuals ideas at ProCore is we just started a diversity and inclusion council as part of our efforts to kind of begin tackling the problem of increasing the number of women in tech. So, that means that 20 employees are meeting, they're funded by the company, and they get to figure out their takeaways, figure out their initiatives, and that's fully supported by the executives. Great, great, great. So, here you are at Grace Hopper, this is your second Grace Hopper. What is your takeaway from this conference? How would you describe the energy? It's incredibly inspiring. It's kind of, it's like being in a bubble for a few days that it makes me want to extend that out into the real world. Melinda Gates yesterday was amazing. Debbie Sterling this morning. He's the founder of Goldie Blocks. Yeah, it's just, it just reminds me of that saying, you can't be what you can't see. And this is the opportunity for people to see. ProCore sent about 30 women and this is showing them, here are these women in leadership, here are women who have had really long careers in tech. So, it's possible for you to. And you know, you're not one of the new entrance to this field. You're already having a successful career, but you're also not a veteran.  It's even in spite of the Google Manifesto and the headlines that we read about the bleak numbers of women in leadership roles. I mean, I would be lying if I said those things didn't hurt. And it's really a mind game where you have to sort of self-manage and believe in yourself despite what other people are saying, not give people's opinions power over what your abilities actually are. And what's your advice to the young women here at Grace Hopper who maybe it's their first time being here? I mean, my advice for actually attending the conference would be just make the most of it. How does one make the most of it? I mean, it is big. It's overwhelming, 18,000 people. Yeah, yeah, it definitely is. I think for me, I'm a big note-taker. I write down those big takeaways and I revisit them. So, in six months when another one of these articles comes out with negative news about women in tech, I can revisit that and kind of feel bolstered by that. Are you hopeful that things are changing? Yes, I am hopeful. And you're on the ground floor here.  That's nice to hear. And I think last year's Grace Hopper, there were 13,000 people. This year there's 18,000. Things are trending in the right direction. For me, I think that pipeline problem is something I think about a lot and getting young girls interested in technology. For me, I didn't start coding till I was done with college. So it's important to me that people are aware of the possibilities at a young age. Great, well, Rory, thanks so much for joining us. It's been a lot of fun talking to you. Yeah, great talking to you too, thank you. We will have more from the Grace Hopper conference just after this.


Hello everyone, so welcome to today's seminar series of the CBNDC, so today we are happy to have Wilco of D&B to hold this session, Wilco is all yours. Thank you, thank you Russell, and thank you for inviting me as a moderator to this Central Banking and Digital Currency online seminar series. Before we start it's useful to keep track of the housekeeping rules, the housekeeping notes, so our presenter today has been allotted 25 minutes, can go ahead for 25 minutes, then the discussion takes over and he has 10 minutes to discuss and then after that we will have some time for a Q&A and that will take about 20 minutes and we try to sort of conclude in an hour time from now and during this Q&A session panelists can unmute themselves to ask a question or make this themselves clear and the other attendees please use the Q&A area, the Q&A box to ask questions and I will do my best as a moderator to select the interesting, while all questions are interesting of course, to select some of these questions and post them to the presenter and the discussant and also note that this recording or this conference or this seminar is being recorded and the video will be posted later on the website, so just to inform you of that well let's quickly move on to our seminar speaker today, today's speaker is Antoine Martain, well he has been around a while and he's been working at the Federal Reserve Bank of New York for a longer time and he's a senior vice president and also the head of the money and payments department, his main interests and research interests include money and banking, financial intermediation and economics of payments. Antoine the online floor is yours, you have 25 minutes, I'll give you a and hands up three minutes before time is up if that's okay with you and perhaps also good to note that if the panelists have a clarifying question please go ahead but let's limit that to only clarifying questions and the bigger discussions for the Q&A, okay Antoine it's all yours please go ahead. Wonderful thank you so much Wilco, so this is joint work with Michael Lee who is also at the New York Fed and Rob Townsend from MIT and before I jump in I have to remind you that these are my own views and not necessarily the views of the Federal Reserve Bank of New York or the Federal Reserve System. Okay so in this presentation today we're interested in an age-old problem of limited commitment in financial markets today, traders meet and agree on a trade some time before the action necessary to settle those trades can happen and the delay between the moment where these traders make promises to each other and the time where they have to fulfill those promises creates the opportunity for reneging on them because of limited commitment and markets have found a variety of ways to try to limit this issue such as third-party mediation with intermediaries or platform margin requirements or other use of collateral long-term relationship reputations things of that sort. Now despite that, settlement fails still occur so the peak of the global financial crisis in the U.S. Treasury market there was about 400 billion of settlement fails per day and this problem was sufficiently serious that a failed charge was introduced which basically put a minimum cost of failing in the Treasury market and despite that what while these measures did reduce the incidence of settlement fails despite that someone fails still occur from time to time. Now this is of interest so the persistence of settlement fail is both an institutional and a technological feature of the current arrangement as I mentioned a minute ago traders today have to submit instructions in order to fulfill the promises that they've made at the trading stage when it's time to settle and there's a delay between those two activities occur and if incentives break down if at the time where they have to take those actions to fulfill their promises they no longer have the incentive to take them settlement can break down and this is of interest because with new technologies particularly the advent of distributed ledger technologies and the possibility of having smart contracts self executing programs people are hoping that it might be possible to resolve settlement fails technologically and in this talk I'll be talking about the token system as a new type of settlement arrangement that could eradicate settlement fails through the programmability of assets so programmability would enable traders to commit to settlement that is at the time where they are making promises they could guarantee that these promises will be fulfilled and as I'll elaborate on in a minute this in order for that to happen there has to be a collapse between the time of trade and the time of settlement that is settlement has to be committed at the time where the traders are negotiating the trade and this is a feature that that's typically described in atomic settlement this collapse between trading and settlement and so this would entirely eliminate the potential for fails so in today's talk I want to talk about a market where traders have to enter interdependent trades to achieve the optimal allocation of a long-lived asset and I'll describe that in more detail but I'm going to hardwire in the necessity for for intermediation there's going to be limited commitments traders will be tempted to break the contracts after the trade or they will they will make promises to each other and they might have an incentive to renege on these promises later and what we're going to do is compare equilibrium trade and settlement under the legacy system that is a system where this inability to commit creates frictions and a token system where it's possible to eliminate settlement fails technologically but that might create other issues as I'll show so the question that we want to ask in this paper is does a token system strictly improve on the legacy on the legacy system and perhaps surprisingly that's not true in a setting where trading is endogenous and intermediation is essential right so these will be two key features of the model so you can eliminate settlement risk but in order to do that you exacerbate an information problem basically what I'll argue is that the token system implicitly requires trader to reveal more information about the positions that they hold and so what it does provide is it provides commitment but with strings attached so to speak like clearly in the environment I described if you could just commit unconditionally then you could achieve a better allocation than then under the legacy system but the token system does more than allowing you to commit it commits it allows you to commit under the condition that you reveal more information and that creates information problems I'll describe so just to give you some intuition suppose that we have an arrangement where a and b agree to trade in a token system right so what what happens and I'll go into more details about this later in the presentation at the time when they're negotiating the trade a and b are jointly writing a program programming the asset so that settlement cannot occur so that both both legs of that trade will happen with certainty and a basic requirement for this to happen is that each trader must have ownership rights to the asset at the time the settlement must take place right it's it's easy to understand intuitively that if you just program assets are not yours then you could just you know make take somebody else's asset and make that asset be delivered in your trade that would create obvious problems but so knowing that you must own the asset in order to program it means that your trading partner has information about you that they can exploit in order to extract a better price from you so this aggravates a holdup problem and it can break down trade altogether all right in the interest of time I'm going to skip the literature review and I'm going to jump right into the model so we have a model with three risk neutral traders a b and c and it's going to be a long-lived asset only one long-lived asset and it's initially owned by trader a and traders are going to have period dependent payoffs which I'll describe in a minute that can be low medium or high and in terms of timeline there's going to be two stages so first traders are going to meet and there's going to be two bilateral meetings between those traders during those meetings are going to make promises to each other they're going to negotiate a potential trade and then after that takes place there's going to be settlements the settlement stage payoffs to the agents only occur at the settlement stage depending on whether they hold the asset I'll describe that on the next slide and because there's this delay between trading and settlement it is possible that agents will have incentives not to to execute the trades they've promised to make at the settlement at the trading stage so what are the the traders payoffs so that the payoffs differ by period and by agents they can be high medium or low or or zero altogether so if you look at the first line this is the payoff of agent A the agent A cares a little bit about holding the asset in period one and in period two but cares a lot about holding the asset in period three and agents B and C also have payoffs that that are random in the sense that at the moment they trade they don't know what will be the value they attach to holding the asset so in particular during period two agent B might like to hold the asset moderately or not at all and as will be more important later for agent C that agent will might care to hold the asset a lot at period three or not at all that will be known but after the trading stage so at the moment where agency trades this is something that the realization of H tilde is unknown so the maximum payoff for holding asset in this economy is comes with B holding the asset during the first period C holding the asset during the second period and the asset returning to A during the third period so from a planner's perspective this is the allocation you would like to be able to achieve and that means that the efficient trades are going to be for A to lend the asset to B during periods one and two so that B holds the asset during period one then B lends the asset to C during period two and C returns the asset to B who immediately returns it to A so that A holds the asset during periods three so can you achieve that in equilibrium that's going to be what we're going to try to find out so what happens at this trading stage as I mentioned there's two meetings that occur sequentially one of these meetings is that A meets B and the other meeting is between B and C now the order of these meetings is random now since B is part of both meetings B knows who she meets first but A and B and C never meet and A and C don't know if they get to meet B first or if they meet C second so in this economy B has to act as an intermediary between A and C that's an important aspect for a result now you could endogenize this and and you could create an environment where B has some superior information or other properties that makes her a particularly desirable intermediary we're going to abstract for that but we're but our results should extend to an environment where we can we endogenize the role of B as an intermediary okay so in a meeting traders are going to negotiate a securities lending contract for settlement at dates one two and three so the kind of arrangement they agree to is something like A lends the asset to B in period one at price B and up to two trades can occur during this trading stage one per per trading stage meeting and then at the settlement stage so so the trades specify our promises to make transfers between between these three traders and so those promises look like A lending to B in period one so that requires two transfers or transfers from A to B at the beginning of period one and a transfer from B to A at the end of period one that was correspond to that and and so those actions have to take place during the settlement stage and might be subject to to incentive constraints as as I'll describe okay so what we want to do is we want to study two settlement technologies one that I call legacy system where incentive problems are where the the inability to commit creates a problem because because traders might have an incentive to renege on on their promises in one the token system where technologically you can solve the commitment problem but you introduce information leakage so let me get into that a little bit so how does someone happen in the legacy system in the legacy systems during this trading stage the only way an asset gets transferred from one trader to the other is if the owner of that asset initiates the transfer and we're going to assume that said that failing to act on a promise that has been made at the trading stage will cause a trader to suffer cost delta we can think of that as a reputational cost or as a penalty like the fails charge that was introduced in the treasury market and we're going to assume that delta is an intermediate value it's not so high that it prevents all fails that would make the model less interesting but it's not so low that fails happen all the time but again you there is a sudden there's a cost for failing to settle but there's no way for agents in this economy to commit to settlement and their incentives might lead them to renege on their promises now in the token system bargaining the act of negotiating a trade with uh with with another trader and programming the assets happens simultaneously and programming the assets allows you to commit to delivery of the asset in the future so the asset is programmed during the meeting that occur at the trading stage those transfer instructions are self-executing they will happen even if no agent take any action further it's impossible for a trader to prevent the transfer of program asset from occurring right so by by programming you have self-executing movements of the asset that cannot be that cannot be prevented and so this this creates the ability to commit to two promises but it requires the holder of the asset it requires the trader to hold the asset at the time where that commitment is made right again you can only transfer your own assets you can't transfer other people's assets so you have to hold the asset and that means that both parties know at the time of trade the the position of the lender if i'm entering in a negotiation with you to lend or sell you an asset i must own the asset and this is information that you're going to be able to use in order to extract a better price for me and i'll i'll clarify that okay so let's let's see what happens in equilibrium first in the legacy system and then i'll talk about the token system so there are two frictions that are going to make it difficult in the legacy system to achieve the optimal allocation one is a limited commitment problem i'm going to focus mainly on that but i'll also talk about the holder problem because both are interesting so the limited commitment problem should be pretty clear what you're trying to do again as you remember is to transfer the asset from a to b for the first period from b to c for the second period and a really wants to hold the asset in the third period but c under with some probability really likes to hold the asset in the third period and the value for c of holding the asset is greater than the cost of reneging on that promise of failing to settle and so if it was probably lambda c agency really likes the asset then then trader c will will fail will keep the asset one more period and will fail on a promise to return the asset to b and that will prevent b from returning the asset to a so in this environment b is the only trader who was matched with both a and c and so for c to require the ownership of the asset b must successfully negotiate both sides of the trades and that means that it's possible for b to not value the asset very much but under the right circumstances to want to do this intermediation because it's beneficial but if um but because the the trades occur in asynchronously b must make market by completing one side of the trade in advance of the other anticipating future trade and that creates the potential for a hold up problem right it's possible for c to make a low ball offer what's happening here so so b needs to pay a price to a that may be in excess of her own valuation of holding the asset and c could make a low ball offer to b because in case b has already acquired the asset because because the value of that asset is not so high is not so high for b and and c can offer something that's just as good or slightly better but if b was able to anticipate that she would not want to engage in intermediation that's the nature of the hold up problem so what is the trader's c's temptation the trader sees temptation is to offer something that's that's less than than b would like to to receive in order to make intermediation profitable so both a and b know that in the legacy system there is some probably that c will not return the asset if if i was probably lambda c the value of holding the assets is very high now for b the reservation price at which she will always agree to intermediate on behalf of c corresponds to a's value for the asset in period two which is l plus the settlement risk premium the the risk to a that he will not get the asset back which is which constitute the cost lambda c h plus what i call the daisy chain premium b knows that which probably lambda c c will not return the asset that will force b to fail on the promise to a and that will cost b lambda c delta so if if b can be confident that c will be willing to pay at least this much to borrow the assets then b is always completely satisfied to do the intermediation because intermediation will be at least a zero profit or or or better that value is increasing with lambda c if b is worried that c might offer something that's lower than that amount that might discourage b from from being an intermediary from from conducting that trade so what happens if b is already traded with a right so first b means was a agrees to pay a price to borrow the assets for two period now that trade is sunk that means that at the time where b is meeting with c b knows that she will be holding the asset at period two and and if c offers a low value essentially the expected value of b to hold the asset and the expected cost of the daisy chain failure in that case b will agree to lend to c even though the total intermediation will will will generate a negative profit but it's too late to to change that now what limits this risk is that c does not know if b has met a prior and c does not know if b has obtained the assets for me and in this opacity about the order of trade order of meeting and and whether b has obtained the asset is going to discourage c from taking advantage of the situation and making a low ball offer so what we can show is that if the limited commitment promise not too severe then the optimal trades will it will be achieved with certainty if the limited commitment problem is severe then not all of the good trades will happen with certainty and basically in order to guarantee that c offers a high enough price b will be forced when she meets a first to with some probably just refuse to trade and and because c knows that that this might happen that reduces the incentive to make a low ball offer and that means that some optimal trades cannot occur in in this economy so what are the strong feature of the system there's this complete decoupling between trading and settlement traders must enter contract well sorry are allowed to enter a contract without explicit proof that they can fulfill those contracts and that allows b to hide from c whether she has met a before or whether she has purchased the assets and so you have this interesting situation that there's an interplay a valuable interplay between the trading system and the settlement system the fact that trades occur asynchronously and that there's no transparency over the history of trades might seem an isolation to be problematic but they are essential this decoupling is essential to facilitate the intermediation of this long-lived assets between multiple traders it is very useful to have opacity in order to allow trades to occur and resolve the potential holdup problems so what happens in a token system in a token system as you might remember the whole point is that you can eliminate the risk of of settlement fail um see we know we want to hold the asset at at date three but b and c can agree to program the asset so such that it will be impossible for c to hold on to it the assets will automatically return to be at at the end of period two and this will occur regardless of the incentives of c to fail so this is great right it allows c to commit and it should eliminate it and it does eliminate the commitment problem but the issue is that it's going to worsen the holdup problem as i'll describe next it also creates an issue with trade in a synchronicity which is somewhat less interesting but i'll i'll briefly touch upon as well so why is the holdup problem worsen well now when b meets c b must reveal whether or not she has ownership of the assets right in the system in the token system for to be able to program the assets you must have the ownership right from that asset so if b doesn't have the asset there is no potential for even negotiating a trade because you can't deliver on that trade at the moment of trading you can only deliver on that trade you can only enter a productive negotiation if you own the asset and that means that c knows that behold the asset and that increases the incentive to make a low ball offer remember in the legacy system b benefited from the fact that c couldn't be sure that she had the asset now c knows with certainty at the moment trading whether b holds the asset and that means that the c's optimal strategy is to is going to be to offer an extremely low price and this can kill b's incentive to to intermediate entirely not get back to that the other issue is trade in synchronicity so in this environment we've hardwired the fact that the order of trade is random was probably one half that means that in some cases a is going to meet with b during the second half of the trading period so when b and c meet there's simply no asset to be traded because the asset hasn't been obtained yet and that means that no trade is possible was probably one half again this is a feature we could endogenize we could have a system was through some efforts agents are able to modify the order of trade or they can search at some cost but but but that would not eliminate our results it would continue to be the fact that it is much the order of trade is much more essential in a token system compared to the legacy system and that would have a cost that needs to be born somewhere in the economy so we think we're fine by simplifying the model and just just going with with hardwiring of the timing okay so the result is that and one you have three more minutes to to reset conclusion thank you yes perfect thank you um so i'm practically there so so if the hold up problem's fine then c will never get the asset because if the value of b is sufficiently low if b doesn't value the asset for itself enough then then b will refuse to to intermediate the only is a only agrees to intermediate assets that she values enough for herself otherwise c will obtain ownership of the asset but only was probably one half when when the order of trade is is exactly the right one so what do we see well we we have an environment where depending on the parameters either system could be dominant the token system that promises commitment but with string attach is going to work well if the commitment problem of c is extremely high and if b values the asset enough right so basically token systems are valuable in environments where the intermediaries care about the assets to intermediate for themselves but it's going to it's not going to work well in environments where the intermediaries do do pure intermediation intermediating assets that they don't want to hold themselves um and and so that eliminates uh arguably a very important role for intermediation which is that you can you can hold assets on behalf of other agents that you don't really care to hold for yourself and so if lambda c and lambda b are sufficiently low then the legacy system system actually will do better from a welfare perspective than uh then the token system all right um so to conclude uh tokenization has clear advantage it does allow agents to completely eliminate uh a limited commitment problem but as i've tried to argue it comes with strings attached collapsing the trading settlement comes at a cost um because it reveals information and and we know uh that in finance too much information can kill risk sharing opportunities or beneficial trades and this is exactly what happens here and so some features of tokenization that just not amenable to certain market structure if in a market where um intermediation is valuable um tokenization can be problematic and lead to lower welfare and and so one of the things one of the interesting things that that our model highlights in addition to to to the key result is that efficient settlement uh protocols are intricate intricately tied to uh to their trading mechanisms uh and in in OTC markets in markets where you rely on intermediation the trading mechanism that kind of trading only works uh with certain types of settlement or works better i should say with certain certain settlement arrangements and with that i'm all done thank you thank you very much Antoine uh for this clear presentation and spot on in terms of time let's now move on to our discussion today our discussion is to you hey and i hope i pronounce it right um he's a professor of finance at the University of Chicago in the booth booth school of business uh choose a main research interests include not various topics in financial markets and macroeconomics with a special focus on contract theory and banking but recently has also been writing articles in the area of cryptocurrency and blockchain too um you have 10 minutes please go ahead John yeah yeah sorry although that did it many many many many times still have the issues uh this is a very interesting paper i'm glad that i am being asked to discuss uh so it's may fundamentally change the settlement in financial markets uh that's a something uh you know not always being the center of financial research uh because in a way that the settlement itself we in it we long time ago we thought it was too detailed to study uh but during crisis you know Antoine presented some other things that are showing that this sometimes will you're nagging and nagging the system and a lot of efforts research focus to get move on to this if this is this area blockchain obviously you know promote this idea called automatic execution when conditions met so page four in this paper says the following program program ability program ability enables traders in the tokenized market to enter trades that are defect or insulated from credit and a counterparty risk that is a really fascinating point and i will just explain one application in the second slide now the the paper is just asking a simple question is this always good um you know i without reading the paper i will say it's you know in general it's good real depends on certain setting but like economists are very good at figuring out that the work could go wrong right so so so what they do is basically arguing that materially otters the information environment for economic agents who then distorted their strategies in callable i really like this way of thinking a lot a lot of times is that you know indeed that these kind of distortion could have a very very big macro impact and often the time that we do not foresee when we implement these changes okay so i will in in some sense it's general perspective shared by my paper with will arguing that the the i o setting that that could change but i will just let me explain that there are stuff first rather than telling you the connection this fundamental information issue is typically ignored in computer science community because they have a different way of thinking about information i think that that's the all right so let me just spend one minute to tell you about the flash along to me to me that's a fascinating idea and also it's it's actually is is working there right so it's interesting development toward this direction it's basically smart contracts allow for the programmatic the ability of enforcing the so-called automatic execution and to mention that this is a loan which is basically saying that you know i borrow at a land only being executed when both the conditions are met so just immediate you know if you you would not say oh i'm letting to you worry about paying back why this is the important you find you know if you don't you're not adding to the finance side you probably say okay whatever it is it is really just open the open the new gate of this like a riskless arbitrage and we do you know as a finance guy that we think arbitrage is such an important force to making sure market is efficient uh often the time we will say you know so-called limits to arbitrage because of the timing issues right you enter the trade and you don't owe the price moves out of surprise or sometimes that just people just negate negate on the trend all these things that with the better infrastructure we can making sure that the price of a one the law of a one price that's the fundamental cornerstone of the financial market uh become more relevant okay okay so let me just tell you the model i saw a question in the in the in the chat room saying just it wasn't clear i you know i don't i'm not sure that my explanation will make it more clear but just different way to explain it maybe that works uh so there are three people abc you can see that these h uh h are the other other other other other guys that will really like this you know getting the benefit of holding so as a result the optimal path is this way there are two trades to to implement that that path one is this between a and b saying that okay you give it to me and then later later on at the time too i'm gonna return back to you so that that's basically the c ab13 that i used in the in the paper if you want to read it okay it's not easy to read i have to warn you and then the second the trade is basically b to c so that's circulated here that's called c bc 23 uh 23 means the two is from b to c and the three is c to b okay so the question when i read it first is that do you really need these report contracts probably yes probably no i you know it's just i i i really applaud the authors to come up with the with this setting to exactly implement what they want to say uh this is a limited commitment as well as a whole problem but i really hope that you know to me the issue is so fundamental that maybe you could do a simpler version of it but anyway that uh this kind of a repo effect is just when you do the contract you promise future doing something else seems to be important for the one set one one friction which is a limited commitment so this is a limited commitment which is the basic friction that drive anything or almost everything except that the first level all that are going to explain uh so this limited commitment is that the c guy that later on he might find this this asset very very uh valuable to him to code so therefore that even though he promised the early on to trade but then he will say you know whatever it is i'm i'm not enter the finger put the finger on the on the on the trade is then you will keep it so i would you know just a small thing that put the h2 in contingently at minus epsilon because then it will make sure that the the you know it's clear that in the social perspective that always the spot is the optimal one but really does not matter it's just the minus epsilon okay so that's the that's the model and another question that the two systems so how do we do it so this is a legacy system legacy system has this there are two key issues one is trading stage trading stage is called ac you're going to meet with b sequentially so initially when i read it i wasn't paying too much attention turns out to be a very important part of the tradeoff uh there's no recall this means that you know i bet you once then we just we didn't leave the phone number to to come back to you okay i do believe that those things are very is is a very relevant to in certain circumstances where you just trade it like a super fast away but when you think about the vc context just not not true okay so and it's also important is that in order to prevent the bargaining with the private information it's a and c make it a ticket of a leave it offered to be a and c doesn't have a private information b has because b knows when did he meet a and c in water water okay uh but but you know bargaining game without the information it's much easier to solve so ac make a difference the whole department is reflected in some low price to be offered by c which entrant did a great job in presentation but i'm not sure i was working so hard to read their paper uh was you guys you know whatever you talked about in the in the in the in the in the presentation move there with some examples will help a quite a bit okay so essentially that it is that in the holder problem is basically if i know that it be already had it then c gonna say that i were gonna just give you a whatever your uh your holding value reservation value because b at that time doesn't have any uh bargaining power the settlement the stage uh then then c may renege that's a little bit okay so legacy two two please two uh just to interrupt a little bit you have three more minutes good good okay thank you so uh legacy system is the comments is quite clean on the limited commitment issue the delivery of a hold up the delivery means like the model to deliver that idea not that the delivery asset can be significantly i already talked about that example will be very important you mean yourself sorry you in the end you basically focus on certain corner solution anyway so here is my understanding okay so for c ideally he's facing b who's stuck with the asset offering a price of em to that what's em to em to em is the reservation price it's a value you can choose the zero in some sense then okay so em is is busy holding back if c's i'm sure that the price will be higher that's the equilibrium efficient the price you're gonna make uh if you want to make implement that that that path and and when em is a low that's high basically so b gains bargaining power by opacity that's you know i believe that's a very gentle result in a colubran actually be randomized saying that even if i meet a i'm gonna say you know i'm not a trader with you to make sure um uh unsure to make sure i'm sure that kind of idea okay maybe as a very benefit of answer so so so that's the t-logic and i think that you know it works just that you perhaps you can do it a more cleaner way okay tokenized system very clear that in tokenized system there are two inefficiencies as as entrant entrant already told you one is a random sequential meeting so only trader with half probability which kind of like very very stark i think entrant defended a little bit when it was a presentation so may could be empirical relevant depending on application i already said worsening hold up problem i hope it's already clear now is that now if you enter into prep proper proper and blah blah blah the trade then i know that you has asked that therefore i will give you a roll call that's it that's my concluding remarks i think it's a very fresh and innovative uh uh perspectives uh uh information going to affect the equipment pricing and the intermediation and just just to link back to my paper with with the con written several years ago but we were imagining this like on more like uh uh not the financial side of whether that trader finance context it's basically blockchain technology orders the nature of a monitor among firms because every firm behave as a node to to let's say you know not uh this is like a you know a product called a verification node and then then it's the monitoring problem that is important to just immediately change it kind of share the same feature and i hope i do think that this is a very important concept that often just ignored by at this point it's a mainly technical advancement so last point is that it will be nice to discuss a certain application thank you thank you thank you too for a very provoking discussion before we open the floor for the q and a's and perhaps uh on to one do you want to sort of make a quick reply to let's say brief reply to what you was was was sort of saying yeah happy to so thank you for other great comments i think i agree with everything you've said so uh while i'll take away is we we need to improve the presentation of the paper i i want to again mention uh two of the things that that you pointed out so um the model for it to be as simple as possible we we make stock assumptions first in terms of the fact that b has to be an intermediary this is uh this is hardwired into the model and in the fact that the the timing of the trades um it is uh it is also um something that that agents cannot share change now i i do believe that both of these things could be endogenized at at the cost of considerable um uh complexity but but i don't i don't think it would modify the key results and so i think to your point it is that it points to the fact that these concerns are particularly relevant in markets where intermediation is is important and in markets where uh the timing in order of trades uh it is um is reasonably fast so yes in case of venture capital or things like that i think that that's not a big issue but but in in financial markets where people trade at even if there is recall there's a cost of having of talking to the wrong person first and so if if you have to reach out to many different counterparties before you can go back to the the the counterparties you really want to get to uh those those would add to the cost so i think it it suggests that our that our model would continue to um to deliver similar results even in in in an environment where where we endogenize these aspects and and i'll leave it at that. Thank you Antoine it's now time to open the floor and the q and a's and let's do it like this that the panelists they are able to unmute themselves and ask questions themselves and perhaps via raising a hand i already see a hand and the other attendees can write questions in the q and a chat area i already see a few there uh perhaps let's first move um jonathan was the first to raise a hand jonathan please yeah go ahead first of all thank you thank you for the very interesting talk i think asking very fundamental question and very important understanding you know the limitation of smart contract so i want to follow up with uh on c equals one of the point and example which is the flesh loan example and at the end he also mentioned this contingent execution it seems to suggest that maybe smart contract can also expand the contract space right say maybe when you sign the two contracts these two contracts execution can be conditional on each other but your terms can be conditioned on each other so i was wondering by doing this would it you know mitigate the whole problem let's say when you try to offer me bad terms right maybe by doing that maybe it will you know cancel the whole the other execution of the athlete or maybe determine yeah so this is a great question i'll take a shot and if michael wants to add anything i'll let and get there um i think so our activity in this paper is to show that there are real limitations to have commitment with strict detach and so one argument that that you've made and other people have made is like oh wait perhaps we could redesign our financial system to get around that problem and i don't think we're making any uh claims that it's impossible to redesign the financial system around those kinds of constraint but at a minimum we're saying like that's a pretty serious redesign so we can't just say hey let's implement this technology and not worry about unintended consequences but but fundamentally our model doesn't speak to uh to the point that that you're making which is perhaps there is uh an interesting way to get around this constraint but but one way or the other you have to deal with with the constraint so i think it's a great point and um i guess i'm sidestepping that a little bit michael do you want to add anything yeah i i think that's a great question and it goes to the question about uh our tolerance about settlement risk uh now our stance is we're showing that uh unequivocally eradicating settlement uncertainty may not should not be the objective when we're trying to redesign the system so if we have a tolerance for settlement risk we can arrange for contingent execution that can sometimes fail but that can still alleviate some of the issues that we're showing for example with the ordering of trades so jibbo as jibbo and anton both kind of talked about the order of trades matters whenever you have to be able to credibly commit at the time that you meet so that's a huge issue if there's a huge randomness to when you meet someone and when you can actually bargain with someone uh now uh contingent execution means that oh well i can agree to trade conditional on me finding a different arrangement in the future and that that i think is the direction that we need to think about um and this is kind of a big tech takeaway as we're thinking about certain applications in very institutional markets like repo markets and other money markets there has been a push to to completely eradicate this kind of time between trade and settlement in repo markets and and we also kind of discuss a little bit about the practical applications that are going on right now and i think there the the takeaway is before you think that this collapses desirable and necessary we need to think about the other complications that might occur given that a lot of these markets heavily depend on intermediaries i saw another hand serial your hands down again um is your question answered or do you want to raise your question serial yeah hi everybody um so this one is a similar question as janet yeah can you hear me yeah prima yes so it was it was a similar question as janet and it was basically on the fact that the two parties could set up an escrow account where uh you know when both sides deliver their assets in the escrow account then the escrow account frees the asset to the other party and so essentially you can solve the information problem in this way so i was wondering what otwan was thinking about this this idea but this you know the fact that the technology allows for this type of accounts to be set up so you know all you know i would be much more optimistic than the authors regarding what the technology allows us to do in the future yeah so i mean i think i'm gonna have i'm gonna answer in a similar way to to the way i answered that johnson's question i think it's really interesting to think about these potential ways of redesigning the financial system around around new arrangement but i don't think that's costless um in uh so so it is again somewhat outside of the scope of our paper but um all of these attempts require uh significant changes and uh if we undertook that say in a different paper it would be interesting to see if if if that creates other potential problem that that we have enforcing uh let me just add uh i think the escrow point is really helpful to understand also a broader kind of benefit that we're actually highlighting in our paper which is in a token system you can eradicate settlement on trades for assets that you don't currently possess in your account so we're not arguing that you need to own the asset literally at the time of trade you need to own the rights to an asset in the future so uh there conceptually this already is very innovative relative to the legacy system where ownership is uh is a point in time thing you need to have the asset in your account that's when you're the owner if you don't then you're not the owner the second aspect is that you know in principle what we do want to achieve is to avoid any level of collateralization that's unnecessary so uh one way to easily kind of resolve a lot of these issues is to incorporate collateral which we're already kind of doing in a lot of arrangements or penalties the hope is that we can redesign it in a way that we can minimize the liquidity costs associated with other practices that can kind of prevent these types of issues thank you thank you Michael for this additional information i'm looking at the q&a box now and i saw i'm sort of browsing a bit i saw a question of jamie but i have the feeling i cannot see that completely that this question on flash loans was already answered in the in the box jamie asked if if let's say the if you do that if you have these flash loans using the blockchain and the repayment must be included in the same block does that mean that time elapses between a provisional loan and an actual loan and repayment and he expended actually on that um but that question is gone i believe so jio did you already i saw your writing did you already um send an answer there yes i think i did and to me from an economist's perspective if things are sure and then within three seconds four seconds even within one day that why would those things matter like the elapses times elapses that that's yeah so that's my answer maybe you have some other perspectives that could matter but i so one thing that's important jamie just raises hands so maybe he'll he'll want to clarify but the idea of provisional loan is uh is potentially problematic here because there is no loan unless there is the repayment so so uh unless all of the ask all of the the legs of the trades are part of the same block none of them actually exist so there's no in that sense there's no time allows but jamie do you want to add something yes uh thank you very much this is a great presentation great discussion uh yeah my question on flash loans is is that similar to the difference between trading and settlement because i can go out and get a loan do a bunch of arbitrage and if it works out but then i can submit all of that to the block uh and it it all settles if it doesn't work out of course it reverts back to the original case uh so isn't that similar to uh kind of a time um between i mean it's a different thing than trading and settlement but uh you can try out all these arbitrages can't you without uh without penalty uh before they become a part of one block and are traded and sold maybe i will just you know i kind of like your question getting to to me the right direction and then some of the parts of the comment like leading me to think that i'm not a totally understanding your point let me just just you know i think that this is a shared with entrant is that the idea of a riskless arbitrage that's like foundation of you know when we do pht is like first first time that we learned this finance is saying that there's a two price same exact asset you ideally you want to trade the same time so that you profit you make the profit but that never being the real world that you're always getting to the issues so here let's say you do you want to do arbitrage and then now this infrastructure innovation basically provided a possibility of doing that you can put even a little more complicated the execution strategy says that if that price is above that if that the other side of prices below that and then put it into the block and then making sure that you at least make that kind of profit this is what i meant and i do think that in this type of a situation whatever the time elapsed i do not think it really mattered so yeah and just to add jimmy i think i think you're right that flash loans allow you to collect a bunch of different trades at different prices and then if and then you can submit them all together if you think that that's beneficial or you or you can submit none of them and basically there will be no trade unless all of the all of the likes together can be part of the same block thank you so reading also in in the q&a room area there is a there is a question by francesca carapela i think francesca you can also unmute yourself perhaps you want to raise this question hi yes thank you thank you anton that was very nice um i just had a quick question about whether there is an implicit assumption that uh only the asset can be programmed but the parties to the contract cannot write a smart contract so a piece of code that can be tailored to whatever needs they have and they want and that is triggered once the asset let's say it's key is inputed in it's put as an input in the contract so it sounded like if this was the case if you're allowed for let's say a smart contract with all of the contingencies that the party's desire and that smart contract is triggered triggered when the input is provided then some of the results in the tokenized economy uh might might disappear would would that be a fair conjecture so i don't think that works um and again i'll take a shot and michael will clarify everything that i say that's wrong uh but we have a companion paper um also with rob where we where we dig deeper into the these ideas of of programmability and we look at at some of these options where trader could have multiple account and do like fake um you know uh transfer the assets in in specific accounts what if he or she wants to fail and so basically in order to really guarantee the absence of failure to settle you need to have very very specific condition and i think that the kind of uh contingent contract that you imagine would not be robust to that because they would allow traders to sort of circumvent um so basically you're setting these conditional payments and then the trader could choose to make sure that the particular contingency doesn't occur so that the settlement that was promised doesn't occur when they want that the when they want to keep the asset um michael do you want anything to that yeah i this is a pretty important point and i i think uh so i'll i'll give you a very simple counter example for why there's a settlement risk issue here uh so in the context of our model b obtains the asset and anticipating that maybe he can sell it to c now you could imagine that b can not share that information and instead say look if i have the asset i'll sell it to you now what that means is that b always retains the option to also renew on his contract with c because now as long as you're able to control the asset in any set of accounts if after you agree on that kind of trade if d comes over and says oh we'd like to have i'd like to buy the asset from you and offers a higher price well then b can now fail on the settlement agreement with c and importantly without any repercussions in the token system where the contract technically has not been broken so i think this goes kind of a in our paper we don't deal with this explicitly because this kind of thinks more deeply about what the conditions are for avoiding settlement risk but because of this issue you know simply providing more flexibility with the contracting will not necessarily resolve this issue and and that's because we just need one friction if b has different set of preferences maybe he has outside opportunities he can still there's a new settlement risk that involves the rises now i think the broader takeaway though is not that the smart contract environment is can be powerful i think it can be the thing is that practitioners and a lot of policymakers are focusing on completely getting rid of settlement risk and our kind of takeaway is maybe we should be a little bit more open to that and think about unlocking the potential to facilitate trades even when there is some settlement risk in the way that we're describing right now can i add one more so so i really like michael's point and i think that if you keep keep pushing this keep pushing this because then you will say you know let's write the d on the on the contract right but once you're pushing this pushing it in the end you need some very very very valid like those like a caught a caught of allicles that you need to trust and at end they're going to make the final nail saying okay this is the right thing to the right contingency to to the right right right on i think that's in some sense that it defeated the purpose of the smart contract because in the end we have to ask what are we trust in the end that's always that i have i do think it is a lot of limitation of smart contract just to be honest thank you sorry can i follow up can i sorry it will go i just want to go up my point and thank you for that and that's that's insightful thank you very much the follow up on that though the thought that i have is but in the model because what you described is so it reasonable but outside the model in the model that you guys presented if you allow for a smart contract of the let's say basic type to that described then you would not have that trade off for the tokenized economy that you have so you would solve the problem of you would go back to some opacity let's put it that way in the model in europe in this paper so there is there's got to be an implicit assumption i i'm guessing that this type of basic smart contract rather than programming the asset so i presume turning the asset into some sort of token that like a liquidity pool tokens i guess uh and uh program that token with the features that you described exactly as you described it now but in this paper if if you allow for a simple bare-bones smart contract you would get the opacity back wouldn't you and i think about it more uh a bit more before i can give you a definitive answer the way that i think about it if we allow them to have contingent trades where they can actually fail on settlement then yes i think it's Pareto improving the caveat here is that once we think about a more general payoff structure for b as well there's still inefficiencies and it still will not obviously dominate the legacy system so i think there's a trade off still that emerges but you're absolutely correct and that's part of the point that we are trying to make as well yeah thank you thank you thank you francesca and michael um it's 605 well in Amsterdam at least perhaps we have time for one last question and there is one in the q&a box um that is pretty high in the list that was by hogar um oh hogar do you do you want to ask your question live i i can do so yeah thank you sorry i'm not sure whether my camera is on but anyway um so my my question basically is uh is this tokenized token economy that you describe here is this actually tantamount to saying that uh if i have to own that security in order to make the smart contract on it that more or less the security is no longer fungible really i really have to have that token and that is being delivered also back at the end of the say of the repo trade um i mean and is there i mean is this actually inevitable can only this be done or could one also make a smart contract on something else with a wallet account whatever but but where where basically i can say okay i make a smart contract where i will deliver this security in say two days and then i still have the possibility to get it in the meantime of course this would mean that the settlement risk would not be addressed in this token in this token economy on the other side it would allow that the intermediary system can still prevail then in the future so that's that's basically yeah one of my questions so i think i agree with that and i think this is what michael was emphasizing earlier which is if you're willing to give up on settlement certainty then then you can get good outcomes and and perhaps take advantage of uh of programmability and so our our point is not to say that programmability is bad in the itself is that it's not a perfect solution to solving settlement risk because it's commitment with strings attached so i think one thing i wanted to add also to example is there's a sense in which it can create issues with fungibility but also uh programmability should give you a lot more flexibility when you're trying to say substitute assets because you get because it becomes easier to keep track of of them that's quite outside of the scope of our paper um but uh but i don't think that particular aspect is problematic in the kind of environment we have in mind um michael anything to add yeah if i think about in the context of repo markets the fungibility for example across like general collateral pools i think that's fine there's no issue with that because you can still commit to a certain type of asset with that belongs to a category of assets and that's fine but here you know the the benefit is actually that once by committing certain types of tokens now in principle as long as the distributed ledger contains information about future ownership you you may not even have to have the token in your account today and that's i think kind of the innovation that will happen even before we go into the kind of more intricate and complex usage of the programmability of assets so that representation of ownership i think is more pivotal to it now whether it the exact orientation of whether it's in an account form or token form is less important the dynamic representation of ownership is the most important future that we're kind of emphasizing here so let me add one last thing which i think is about all of the questions we've been discussing right now so there's a bit of a tension between saying like oh but we can make the the system even more complex than it is today and that will improve things and the fact that the reason we we decided to focus on on this idea of some uncertainty is because that's the first thing that the industry has been focusing on so we didn't invent that problem this is what a number of actual projects are looking at so if you think of this sort of you know world of like solution in in in search of a problem that's what the that's what a lot of the industry has been interested in and so we can always say oh but that's not the right problem we should be focusing on a different problem and that's perfectly fine but i think there's a bit of tension between sort of saying like what can we actually solve versus like oh we could make things a lot more complicated and solve other things I think thank you Antoine for this this sort of last last words uh in that sense uh i think we have to stop here it's um thank you very much perhaps there's a last uh last well not really advice in the q&a box i saw that people would appreciate it if the people if the paper could have a companion non-technical summary on Fox EU so that would be then the next project Antoine and Michael and and and i'm hope thank you very much for everybody for joining and for the questions and for the i think a very interesting discussion so i'll give it back to to Russell thank you everyone i think we have a very lively presentation today thank you will call thank you Antoine thank you jico um so just to remind on on may 20 we have our next session which will be presented by Simon Mayer currently at Chicago and will be discussed by Haseul Ferdinand or Pan and will be moderated by John Frost or BIS but in the meantime so there's a lot of cvdc events so the next next week so Haru Uleg of Chicago will have the new cvdc seminar series where we'll be talking about the cvdc in ukraine a very interesting development and the next week so we have the may 13 will be a conference organized by the cber so their second annual conference so keep an eye on a lot of events in this space i hope to see you soon i won't keep you guys too long so it is large right here and six in the u of people are okay good to see you all thank you thank you much thank you thank you very much


Good morning everybody. It's time to leave for truck world. It's like 4 30 in the morning And I'm gonna jump in the pickup Head to the airport. I gotta jump on a plane. A trucker on a plane Maybe that's what we'll call it trucker on a plane. Gotta get on a plane today. I'm used to driving places I like to drive but today we're flying In the sky. I just had to stop by the shop here and pick up a few things But now I'm on the way See you there Parking economy Here's the airport. No idea where to go really, but we're just gonna wing it. Well, this looks fun. Good day, sir I'm off to Toronto at the center of the world How do I get out of here? We're here. We're just setting everything up Well, everyone else is setting everything up We're still walking around Trying to figure out what's going on as of the Volvo Booth here that they're setting up just massive This thing's gonna be huge And it keeps going and going and going This whole place is gonna look totally different tomorrow. I guess this is the restaurant area bathrooms there. Oh check this out The Dukes of Hazard are here. It's awesome There it is so everybody is busy setting up right now tomorrow is the big day Kind of looks like the show is already started, but Really, you just walk around amazed at how much effort people put into getting their equipment here. Look at that It looks brand new And they might have hauled it here on a trailer, but chances are a lot of this stuff drove in here and Imagine the detailer's job of making this thing look brand new like it's never seen pavement and it's like The Peterbilt booth here. It's gonna be a lot of fun. Did I say that yet? I've been set up in a beautiful motel room I'm here in Toronto my buddy Cam from Keystone him and I are both gonna be at booth 20 hanging out there If you're wondering what's truck world? Stay tuned. I'll show you. It's gonna be a lot of fun