‘Wartime CEO’: Urbit’s Founder Returns in Shakeup at Moonshot Software Project

As a seasoned observer of the cryptocurrency landscape, I must admit that the ongoing saga of Urbit and its enigmatic founder, Curtis Yarvin, continues to intrigue me. Having followed his career since the early days of Mencius Moldbug, I find myself drawn to this complex figure who seems to defy simple categorization.

By all accounts, Urbit has been struggling.

The 22-year-old software project known as Urbit, which is being overseen by the nonprofit organization, Urbit Foundation, that aims to rebuild the internet from scratch, is currently facing financial difficulties and has only a few months left before running out of funds. Last year witnessed a significant departure of startups and developers from the decentralized ecosystem, as stated by William Ball, one of the foundation’s board members, during a call with developers on Thursday.

1. On the network, the user experience continues to be somewhat awkward, which is one of Urbit’s unique appeals, but it’s not a long-term viable situation for a project aiming to dethrone something as widely popular as the internet. As per Dune Analytics data, the cost of a star, the second most valuable digital real estate unit on the network, has dropped significantly from around $27,000 at its peak in late 2021, now sitting slightly above $1,000.

Last week, the Urbit board decided to make drastic changes.

The foundation dismissed Josh Lehman, who had been serving as executive director since 2021, and appointed Christopher Colby, founder of Alphabet – a prediction market startup, in his place on an interim basis. The board also abandoned a fundraising plan, initiated by Lehman, that aimed to establish a new blockchain layer on Ethereum (using software from the Cosmos ecosystem). Instead, they decided not to proceed with this proposal.

To the surprise of both Urbit enthusiasts and outsiders, the board has reinstated Curtis Yarvin, the project’s founder who departed in 2019. Yarvin is recognized for his politically unconventional writings – I’ll delve deeper into those soon. (Don’t worry, it won’t be too much.) He doesn’t hold a formal role at the foundation, but he plans to guide the strategy, as stated.

Yarvin, who seldom communicates with the media, expressed to CoinDesk that they pay no mind to titles. Instead, their focus is on resolving the issues at hand.

The upheaval caused prominent members of the Urbit community to step down. Among those who left the organization were the Chief Technology Officer, Ted Blackman, and senior software engineer, Liam Fitzgerald.

Blackman clarified that though he’s no longer employed by the nonprofit, he intends to carry on his work with Urbit, in a volunteer capacity as an open-source developer. Additionally, he’s going to establish a separate consulting firm to cover his expenses.

“Blackman shared with CoinDesk that the primary developers of Urbit, including himself, remain dedicated to developing the operating system, regardless if they are being compensated or not. Contrary to some reports, the claims of Urbit’s demise have been overstated.”

Fitzgerald, expressing his displeasure with the chaotic manner the board conveyed the modifications, seemed noticeably less eager compared to Blackman, yet he didn’t dismiss the idea of persisting in developing Urbit beyond the foundation. In simpler terms, he stated that it could be a potential path forward.

Yarvin implied that he was attempting to rectify any issues or smoothen things over, as he stated, “There are a lot of feathers that are out of sorts.” He further added, “We are currently working on making things right again.”

Despite this, he warned the participants during Thursday’s extended conference with developers that it might be necessary to crack a few metaphorical eggs.

He informed his peers, “We need to address this issue immediately.” However, rushing may compromise our teamwork.

On a Tuesday, Ball informed CoinDesk that the organization will maintain half of its workforce. He added, “Spirits are significantly improved now.”

What happened to Urbit?

In simpler terms, Urbit can be seen as a network consisting of individual servers that are decentralized. Its ambitious goal is to empower internet users by returning control over their data, which has increasingly relied on large, often politically influenced platforms such as Facebook and Google for storage.

Highlighting the grandeur of the project, Urbit boasts its unique programming languages (Nock and Hoon), self-developed operating system (Arvo), and individual identity system (Azimuth). This system, from its naming convention to its digital identities like ~fodrex-malmev, is quite peculiar. Yet, the passionates have warmly adopted this quirkiness, referring to themselves as “Martians.”

Currently, the primary functions of the network include direct messaging, group conversations, and the creation of Urbit. However, the ultimate vision is for all online activities to be possible within Urbit in the future.

Yarvin, who had experience in Silicon Valley’s booming dotcom period, began working on Urbit as early as 2002. In 2013, he established a company called Tlon (inspired by a Jorge Luis Borges tale) for the development of this software. Yarvin departed from Tlon in 2019, but maintained substantial control over the digital property or domain within the network.

By 2022, despite (or possibly due to) its complexity, Urbit managed to draw significant investment capital, startups, developers, and a lot of attention. The organization was established to assume control over core development from Tlon, which moved towards product development. Writers, artists, and tech professionals were all present at Assembly, the annual gathering of the community, where they shared their insights.

The atmosphere was captivating. According to Yarvin’s assessment, it was around this time that the Urbit community started facing challenges.

He shared with CoinDesk that the excessive compliments made people believe they were dealing with a more advanced system than reality. In essence, we began to mislead not just others, but ourselves as well about the maturity of the system.

Since Urbit didn’t participate in the massive Initial Coin Offerings during 2017-2018, it never amassed a large financial reserve. However, according to Yarvin’s account, the project found itself facing a predicament similar to many cryptocurrency teams.

As a researcher, I found myself immersed in the process of constructing an ecosystem, with the belief that we were prepared for this endeavor. However, once embarked, there was no turning back. Unfortunately, this led to a substantial amount of unused code and a great deal of disheartened individuals.

Previously, Lehman mentioned that one difficulty faced was that the foundation financed essential growth through the sale of “network address clusters,” these being the largest segments, to venture capital backers. (These clusters consist of smaller units, akin to stars, which each hold unique identifiers known as planets.)

“Lehman explained to CoinDesk that the challenge with receiving effective venture funding is that venture capital firms require growth. Since we’re primarily responsible for core development, we don’t have access to tools that promote growth, which relies on product companies. Unfortunately, many of these product companies were departing from the ecosystem.”

One such company is Kinode (formerly Uqbar), which is trying to build a similar peer-to-peer computing infrastructure with a more traditional software stack, including the Rust programming language.

Ben McCormick, a consultant at Kinode, stated, “It became clear to us gradually that the software known as Urbit wasn’t going to meet expectations. Many others wondered, ‘What if someone developed Urbit in a more familiar way?’ So, we essentially decided to create something similar to that.”

Yarvin complimented Lehman swiftly, yet he noted that Lehman’s leadership style would work more effectively in an established company rather than a new venture, which ought to persistently act as if it’s battling for survival, regardless of the funds it has gathered.

Yarvin stated that Josh excels as a leader during peaceful times, but he emphasized that Urbit remains in its startup phase and faces an ongoing risk of failure unless we make it fully functional. To achieve this, he believes a CEO who operates under wartime conditions is necessary for the project’s success.

Like Blackman, Lehman said he intends to continue working on Urbit.

“A lot of people are very motivated to keep doing it,” he said. “I am, too.”

What’s next for Urbit?

When asked about strategies to extend the foundation’s runway, Yarvin replied: “We need to create something attractive for investors, and we’re working on it swiftly. … Developing a project that people appreciate and addressing the token economics thoughtfully will certainly suffice.”

A key aspect of his revitalization plan involves boosting Urbit’s expansion as a platform for identities and social networking, rather than solely focusing on the gradual development of its operating system.

Users can opt for utilizing decentralized servers powered by the Arvo operating system, but it will no longer be compulsory for them to do so in order to be considered part of Urbit.

In the interview, Yarvin stated, “The society of Urbit consists of individuals engaging through their Urbit personas. Expanding this community essentially involves drawing more people into this realm, not necessarily requiring any particular technical advancements.”

As a crypto investor, I understand that the foundation behind this project aims to accelerate the social network’s growth and rectify issues in the address space market by implementing modifications to Azimuth – an Ethereum-based smart contract that essentially acts as a registry office for Urbit.

Initially, Azimuth operated within the primary Ethereum network; however, it turned out to be a costly method for verifying domain ownership as gas prices skyrocketed during the 2020-2021 cryptocurrency boom, making on-chain transactions increasingly expensive.

In 2021, Azimuth introduced their own “simple rollup” system, L2. While this solution tackled an issue, it came with certain drawbacks. Assets or identities originating from the rollup layer can’t be recorded on the primary Ethereum chain, similar to signing a house deed without being able to inform the county clerk about the transfer.

Instead of Lehman’s idea to develop another layer-2 solution on Ethereum, Yarvin has suggested migrating Azimuth to an existing L2 platform. Although he clarified that the team isn’t making any firm promises yet, they seem inclined towards Base – a network developed by the prominent crypto exchange company Coinbase, recognized for its affordably priced transactions.

The upcoming Azimuth contract will generate tradable “Visa” tokens that are interchangeable, which can be purchased and sold either through centralized or decentralized cryptocurrency markets. These Visa tokens can then be converted into unique, non-interchangeable “planets” on the Urbit network, but not all at once.

Visa tokens will start being usable immediately for some, while others won’t become redeemable until a year or two, five years, or even ten years after they are issued. As the waiting period increases, the cost of a visa token should decrease.

The idea is to incentivize long-term commitment without locking up tokens. As Yarvin put it: “People with diamond hands are rewarded for going deeper in, and people who want to get out have a very liquid way to get out, but they all need to squeeze through the same small hole.”

About that weird political stuff

For quite some time, Urbit has been associated with the complex and extensive right-wing philosophy of its creator, Yarvin (often compared to Frederick the Great rather than Barry Goldwater), as expressed in lengthy, hard-to-understand blog posts dating back to 2007 under the pseudonym Mencius Moldbug.

In 2015, a technical conference withdrew my speaking invitation. The subsequent year, another tech conference faced a loss of sponsors and came close to cancellation due to my being given the opportunity to speak, amidst concerns that this verbose, spectacled engineer might somehow make attendees feel “unsafe.” (It was rumored that some feared I would bore them to the point of death by reading my posts aloud, or subject them to my poetry.) [First-person perspective as a researcher]

Based on my years of experience in the tech industry, I have attended countless conferences and witnessed various presentations by numerous experts. However, this year’s conference was unique because it featured a talk by Fitzgerald from the foundation, which left me quite impressed. The presentation went off without a hitch, suggesting to me that the once controversial project, Urbit, is no longer radioactive in the tech community. As someone who has worked closely with several cutting-edge technologies, I can confidently say that this development is significant and worth keeping an eye on.

In the developer call, William Ball, a board member, expressed that the calculated decision to reinstate Yarvin could be challenging, as the backlash from cancel culture of the 2010s and early 2020s seems to be lessening.

When I learned that Curtis had returned, my first impression was, “Oh no, here comes someone who might disrupt things.” However, upon speaking with Yarvin, Ball and the other board members found themselves pleasantly taken aback. (CoinDesk was informed of this later by Ball.)

Ball remarked, “‘This individual appears to have significantly evolved over the past five years,’ or perhaps I was unaware of his earlier self, he noted. Yet, it’s evident that he possesses a degree of wisdom and maturity concerning real-world business challenges. Simultaneously, he maintains an ideology that certain computer science research should be conducted independently from commercial deadlines.”

Yarvin shared with CoinDesk that, on the contrary, he feels his controversial image serves as a benefit to the Urbit community. This is because it helps weed out individuals who prioritize creating a ruckus over actually completing tasks.

In simpler terms, he stated that due to his political standing, it’s not common for extreme left-wing individuals to approach him, and he sometimes needs to ask extremist right-wing individuals to leave.

On decentralized networks like Urbit, individual users aren’t removed by administrators as in centralized platforms. Instead, they are expelled from specific, user-managed communities when their behavior becomes unacceptable.

As a researcher, I can express it this way: “If Urbit, as a society, has any political purpose, that purpose is to depoliticize. This aim is to establish a truly secure environment for all individuals – everyone without exception – which is something our world greatly requires.”