The advent of digital cookies in 1994, small data packets that stored a user’s online history and preferences, revolutionized Web2 and consumer data privacy, creating a permissive milieu for the rise of Big Tech. Cookies paved the roads of digital feudalism, where the data defining our virtual identities were owned and exploited by companies like Meta, Google, and Twitter.
Eponymously named after the classic American soft and chewy cookie, Snickerdoodle Labs is Web3 cookies sprinkled with some Google analytics and spiced with values. GDPR compliant by design, Snickerdoodle believes that enterprise applications of NFTs will be transformative for data infrastructure and the transition of data aggregation points from Web2 oligarchs to the individual, empowering the individual as the sole arbiter of their self-sovereign identity.
Jonathan Padilla, CEO and Co-founder of Snickerdoodle Labs, joined us for a vVv AMA on August 18th. Jonathan has an extensive background in government and politics. He has led local, state, and federal US campaigns, advising and offering counsel to the Obama administration on US cryptocurrency regulations and policies. He discovered his passion for the blockchain during his time at Oxford and, as a Schwarzman Scholar at Tsinghua University, wrote a master’s thesis, “Transnational regulation of digital assets,” that was used by the Financial Stability Board and the G20. Continuing his work in this space, he helped build Stanford’s Fintech lab, Future of Digital Currency Initiative, and led global blockchain strategy at Paypal. In May 2021, Jonathan co-founded Snickerdoodle to create change and impact the world in a more meaningful way.
vVv: Jonathan, what drives you personally to build Snickerdoodle?
Padilla: I’ve been in this space for over five years, and I’ve seen some crazy things. We’ve seen companies that have no value proposition raise hundreds of millions of dollars that have been squandered. I think about my upbringing. I was supposed to be a lawyer and ended up not going to law school and had a real desire to have an impact for the greater good. The Jesuits Catholic group trained me, and they had a very simple mission of being men and women for others. And so I think about my personal philosophy: how do we be equal for others in this world and have that social justice value driven? From what we’re building as a company, we have the real potential to generate value for our token holders and shareholders. We can make a lot of money; there’s nothing wrong with being a capitalist. However, at the same time, we can temper that with a value-driven approach to making the world a better place. The fascinating stuff for me is the stuff that’s 5-8 years down the line. When we get to that notion of private sector UBI and uplifting others and being a company of good. I love the people I work with and have a phenomenal team that’s also values-driven. We have a finite amount of time here on this planet, and we can choose to do good, we can choose to build, or we can choose not to use the time we’re given. That’s what drives me on a personal basis.
vVv: What keeps a company or a bad actor from potentially copying the data if a (business) customer decides to share the data?
Padilla: The truth is that’s not possible in the system. Data sharing in Web2 includes sharing the granular data inputs. Once you share or sell an input of data, that data now belongs to the recipient entity. A firm that wants to use the analytics and insights platform is seeing population-level data and the outputs of the data. And suppose we want to do a Web3 advertising campaign. In that case, it’s the data wallets we’ve built communicating with each other and sharing those critical pieces of information without revealing it to the business customer. So we’ve thought long and hard about this. It’s a whole new world in terms of not selling the underlying data but the individuals being empowered to lease their data to various actors for specific purposes. In this innovative business model, we can lease the data, which becomes this renewable resource that allows monetization in multiple fashions. Every individual retains their control over it and the underlying inputs that make it practical.
”It's a whole new world in terms of not selling the underlying data, but the individuals being empowered to lease their data to various actors for specific purposes.
vVv: With the public blockchain data, do you see any risk in the user data potentially being scraped and sold by another party?
Padilla: We don’t think that will be very easy, given how we built our architecture. If we think about firms such as Nansen or TRM Labs, they’re looking at on-chain data and compiling it. They can tell you a16z’s Ethereum addresses, and they’ll try to get a signal. And that is great if you have a minimal number of trading use cases, but for what we’re trying to build, it’s this marriage of the on-chain data. We think there’ll be more protections as we consider the merit of zero-knowledge proofs married with personal identifying information. The secret sauce for Snickerdoodle is this marriage of the on-chain data with the off-chain data, which becomes incredibly difficult to scale and scrape. Without the individual’s consent, it’s complete noise when trying to scrape the data. We’ve given this much thought, and it’s a privacy-preserving data layer that would not make any scraping practical. In addition, given that the individual has to consent for this to work, that adds another layer of difficulty for any kind of nefarious action.
”The secret sauce for Snickerdoodle is this marriage of the on-chain data with the off-chain data
vVv: When approaching other businesses with your value proposition, why would they want to work with Snickerdoodle? And do you see a risk of them being used to owning and gatekeeping the data that they collect directly?
Padilla: The simple answer is, given how we built our tech – I’m emphasizing again that we’re sharing outputs and not the inputs – a business has a genuine desire to have an analytic suite, to understand their customers, to understand how best to iterate on their product. What we face right now is that perhaps 1% of firms have built an in-house data team, and maybe they have a tableau engineer to perform this functionality. But the vast majority are very agile, lean teams that want to build great products and don’t necessarily have the resources or bandwidth, or maybe both, to have an advanced data science team. The value proposition we present to the businesses is that we can give them insights and analytics on their customers. We can tell businesses what their customers are doing on a multi-chain basis in a very turnkey economical fashion. That then empowers the business owner and executive to go out and make the right marketing, product, and host of decisions to improve business and maximize revenue and value. The reality is that we face a world now in Web3 using pre-web1 tools. We want to give the proper Web2-type tools that firms and enterprises traditionally use and give that a chance to be functional across Web3.
vVv: There has been some mixed point of view relating to the value of Web2 data and the implications it might have for the value of the data that Snickerdoodle is facilitating to its users. Can you provide an estimate of what you think Web2 data is currently worth and whether or not you think that Web3 data is going to be more valuable?
Padilla: It will be composite data. We’re at a point where valuing data is incredibly difficult because there’s no factual assembly of a direct value on a diverse system. Instead, by blaring in Web2 data with the new Web3 data, and with this decentralized data lake we’re building out, you think that this is the first step to building an automated marketplace effectively for data. And then, we can begin to price the data with some interesting applications, as we think about DeFi, and how the value of data gives people chips on the table on a level playing field. I will not be bold enough to say that I can properly value the data. I think that’s a conversation we’re having now with a number of economists at some top universities. But that is something we are spending a lot of time thinking about. Our goal is to better understand how to properly value that over the next 12 to 15 months.
vVv: Do you think there’s a correlation that if the Web3 data is potentially worth less than estimated, it will devalue the proposition of Snickerdoodle?
Padilla: I don’t think that would necessarily bring down the value of Snickerdoodle. We’re on this evolution of data from Web2 to becoming data in Web3. And that will continue to take shape as more firms enter this space and build products. Snickerdoodle is in this to be a 25-year class company. Suppose we can do this and generate the revenue from our SaaS product on the insights analytics and transactions for this data AMM (automatic market maker). In that case, we’re in a good spot to have the runway and value to do this. My vision: Snickerdoodle, in 5-10 years, will be enabling private sector UBI. What I mean by that is universal basic income, where we have the framework and infrastructure for data. The value of data becomes something that people can be paid out either in monthly installments, a lump sum, or perhaps as collateral for a loan. And if we have this massive data DeFi ecosystem built on Snickerdoodle’s infrastructure, then the data economy will be worth trillions of dollars. If we can tackle this Big Data challenge and have that be a macro infrastructure, it generates a lot of value for our token holders and Snickerdoodle. I think it’ll be a tremendous force multiplier on wealth transfer to those in the global south when we think about emerging markets.
vVv: What do you envision Web3 native advertising to look like in the future?
Padilla: We imagine this as leveraging the data that we discussed. Suppose we have an infrastructure where this edge computing network allows people and these data wallets to talk to each other. In that case, you can say to Adidas or another firm that you want to target 1000 users in the UK, who are fans of Dua Lipa and would like to do something with new Kevin and the team. One can have scalpel-like precision that allows for next-generation targeting. And it’s not so much that people are opposed to advertising; it’s more that people want to have something that is curated and has a keen interest to them. We enable that to happen, where an advertising firm or brand is not seeing me as Jonathan Padilla from California. They’re seeing somebody with a comparable profile. This privacy preservation is supercritical and allows us to go directly to the wallet in a useful function for the user. Our goal is to demo this at Consensus next year. We think this will be a great way to derive value for the user in terms of compensation for every time their data is used, but also curate experiences for them that are meaningful and impactful.
vVv: How will Snickerdoodle incentivize the end user to install their data wallet?
Padilla: There is a couple of ways we think about this. First, we have our native data wallet that we can integrate as a widget with other wallets such as MetaMask and Phantom. We see this as multiple efforts to achieve wide distribution. In the short term, it’s more of a barter economy, and the models are being built out. Two examples are a blockchain-based game and a DeFi platform. We can incentivize gamers to permission their data in exchange for an in-game asset like a skin. For DeFi platforms, it could be another five basis points towards the yield. Frankly, we’d love feedback and insights from the vVv community. This is part of our customer user research. From our initial research, these types of things will be compelling. In the longer term, we have the token economy and ways to incentivize both downloading and contouring of the token economy, where users will be paid in our token. The nice thing is we have built a pretty robust infrastructure that not only can deliver rewards that Snickerdoodle has built, but it has the potential to deliver rewards from anyone, any dApp, or and DeFi platform. We don’t even need blockchain-based rewards. It could be a coupon or other types of nudges.
vVv: How does Snickerdoodle plan to onboard non-crypto native users?
Padilla: This is late Q4 2022 – Q1 2023, with the Web3-based games having a strong effort in onboarding more crypto native users. We have some interesting community marketing that we’ll be implementing. We’re super excited about Crabada and Shrapnel. But there’s a big list of others in the pipeline, and we think these would be powerful in expanding the network. We’ll be announcing more publicly in the next month or two.
vVv: Are there any plans for Snickerdoodle to build a decentralized digital ID solution? Do you think Web3 will enable digital identity without the involvement of a centralized entity or intermediary, or will government recognition be necessary?
Padilla: There is going to be a hybrid approach. We have a situation where regulation is inevitable. I know people have strong opinions on this. My thesis is simple. We have a chance to have huge wins for the vast majority of people with minimal governmental compromise. That means that regulation and working with those actors will have a regulatory framework that people can trust. That big enterprises and businesses are willing to comply with. This will help bring more actors into Web3 as we think about AML and KYC requirements, from centralized exchanges to DeFi to even traditional banking, that can move into Web3 environment payments. This is going to be huge for making blockchain here to stay and driving a lot of value for those who are early adopters. Regulation is not a bad thing. Regulation is necessary, and that shows that we’re entering a stage of maturity across the industry. That being said, as we think about Snickerdoodle products on the digital ID front, I’ve worked on digital ID pretty extensively at Paypal and the lab at Stanford. We have a phenomenal head of ID, Carrie Frank, based in London. Carrie worked for me when I was at PayPal as well. We think there’ll be a digital ID component here, but we’re not starting with digital ID because the utility is not there yet. For firms that have approached digital ID first, they’ve had a very tough time monetizing that, and it goes to building something that hasn’t quite gotten the need yet. We have a vision for an ID-type product. We think this can integrate with many different applications and serve both decentralized needs and the needs of governments, especially in regard to some exciting conversations with various UN bodies and how this could be used for refugees and others. There’s a need there, and we’re doing this in a way that I think will be respectful of the finite dollars we have and prioritizing things that maximize the overall success of both the network and the company.
vVv: How far are we from crypto blockchain regulation, and do you see oncoming regulation as an opportunity for Snickerdoodle – accelerated Enterprise NFTs adoption? There is well-advanced MiCA regulation in EU. Aren’t you afraid of its implications e.g, KYCing of the transacting users?
Padilla: Regulation is good for Snickerdoodle. My team is doxed. We’re all known actors and not going to disappear into the ether. My background working in government is pretty extensive. I’ve given advice and counsel at the White House on crypto regulation and was just in the UK to meet with several government actors on several of these types of regulations.
I’m slated to teach a course at Oxford next year on blockchain for non-technical majors to provide good instruction to people returning to the government. I think we built Snickerdoodle to be a good actor. Our brand is trust. People need to trust us; governments need to trust us; enterprise needs to trust us. We will make decisions that protect the company’s goodwill and make us a force multiplier for good. And we’ll have to make compromises in terms of sometimes not optimizing for profit to protect the trust. By the way, there are companies that are led by value, and there are companies that are led by values. And that s has a tremendous amount of impact and difference, even though it’s simply one letter at the very end of the word. Snickerdoodle is a values-led company. And that is how we carry ourselves. That is how I instruct the team.
There are three rules in the company. One, don’t be an asshole, which is easier said than done. Two, humility over hubris; I think we have to be confident in what we know but humble and always open to learning. And then rule three is: learn something new every day. These are very simple rules, but those are my golden three rules for the company. As we think about regulation, we’re ready for regulation. I think it will benefit us as we build our architecture and our products. And we hope to be a conduit there to onboard more people into an environment with good policy.
”Our brand is trust. People need to trust us; governments need to trust us; enterprise needs to trust us. We will make decisions that protect the goodwill of the company and make us a force multiplier for good.
There are companies that are led by value, and there are companies that are led by values.
Snickerdoodle is a values-led company.
vVv: Do you think the Snickerdoodle model could be expanded to machines and Economy of Things space. Or in other words do you think there is room for machine data monetization via machines NFTs on the Snickerdoodle layer?
Padilla: 100%, and we’ve already thought about that. We’ve designed our network to have headless devices, Raspberry Pi devices, and we fully believe in a world where we’ll see IoT devices plugged into this. The applications there are going to be tremendous, and I think we’ll probably see more data from device-to-device communication than even person-to-person communication. From the earliest days of Snickerdoodle, we thought about how would this work. And we thought about integration. If you’re at a stadium and you have an NFT ticket, you know where you’re sitting, and you know that there’s a lull at a concession stand, and we can nudge you in real-time with a coupon to your wallet to get a beer that’s 20% off in this particular section. We think that IoT device-to-device communication layers are not only going to happen, I think it will probably be bigger than even the human-to-human interactions in the not-so-distant future.
vVv: How is the value generated for token holders? Does one have to stake tokens to use Snickerdoodle’s infrastructure?
Padilla: We imagine this as the Uniswap type model. If an address wants to target 1000 users in London, they have to leverage the token to get that subset of people. You have to transact this data economy using the token. That design drives value to the token holders. It’s designed to drive the velocity of the token. It’s designed to drive true utility. I’m a firm believer that not every blockchain project needs a token. The team sat down to think about how do we decentralize this? How do we have a very real use case? We thought about this token in essence, being a claim on this decentralized data lake, and we had offers from many big corporates who wanted to build the data lake with us. However, we couldn’t do that, given how this would be structured. We need decentralization to be a good and honest broker. As the data’s value increases, the data’s utility and the number of users who have contributed to the data economy also grow. That’s all designed to drive and add value to the token. We earnestly believe that the more users we have and the more applications that are built on this data economy, it’s going to be a great way to have not just hype or false promises. Still, the most important commodity of the century is the backbone of how we value our token.
vVv: What will be the revenue stream for Snickerdoodle as a company?
Padilla: We have a very straightforward SaaS monthly recurring revenue model with a basic freemium model and then a premium model. In truth, we want people to get used to using the product. We’re not going to over-optimize revenue early on because every time a customer brings in, we get more users from that kind of growth hack. Our goal is to prioritize user adoption, the network downloads of the data wallet. Then we can begin to monetize more heavily on the analytics insights as that grows over the coming years.
vVv: For a company to buy the user data using Snickerdoodle, will they need first to purchase the $Doodle token? And if yes, how will they be able to purchase it? Will it be from the open market or Snickerdoodle directly? Will it be a capped supply of the $Doodle token, or will there be an infinite amount of tokens entering circulation?
Padilla: We do have a capped supply. The current token economy has a cap of 13.5 billion. We’ve designed this so that firms can buy $Doodle on the open market once the token is live. Firms can also work with Snickerdoodle to facilitate this, which will be important for enterprise users who just want to transact with fiat. It also means that if you’re transacting in fiat, you could pay in fiat, but on the backend, we will exchange fiat for tokens. The token holders will always get their value, and we will facilitate that with a white glove solution. In short, yes, if you want to access the data within the data economy, you will have to transact that with $Doodles in some way or form.
vVv: How are you integrating different data protection rules from different countries? What if it’s required by law to make it possible for consumers to delete their data?
Padilla: That’s the beauty of the system. People can delete their data pretty easily in the Snickerdoodle system. Snickerdoodle doesn’t own the data the individual does. We are merely providing the infrastructure and the tool sets for people to store it, monetize it, and perform several of these applications. This is why we’re GDPR-compliant by design. We really are focused on the individual being self-sovereign. This paradigm shift, where the individual is the aggregation point, also means that they are the arbiter and final decision maker on that data.
”This is why we're GDPR-compliant by design.
This paradigm shift, where the individual is the aggregation point, also means that they are the arbiter and final decision maker on that data.
vVv: Are there any hurdles for Snickerdoodle regarding data residency regulations, and do you think there’s a possibility of certain countries potentially banning Snickerdoodle? Because we’ve just recently witnessed the regulation of Canada, for example, where they now restrict the amount of any tokens, including Ethereum and Bitcoin, that you can buy.
Padilla: This is where our subnet architecture becomes very powerful. We can build purpose-built networks that are siloed off but still interconnected. The architecture exists to do this. It’s not ideal, but it is entirely practical, given how we build the technology. In short, we’ll cross those bridges when we get there. Outside of Snickerdoodle, the work I’m doing tends to be very much focused on foreign policy. I work with the Atlantic Council, Stanford University, and the Bretton Woods Institution. The truth is, I like to offer relationships and pathways to domestic and international policymakers, and I think this puts us in the right room to have these types of poignant conversations. It’s not just Snickerdoodle advocating for Snickerdoodle. Snickerdoodle is a flagship for how these types of conversations ought to be. The joke I used to tell people is that I can talk to my friend Brock Pierce, a character and that I can also go and talk to Dan Schulman, the CEO of PayPal. And that is currently a rare thing in Web3, where you have people who can put on a suit but also attend a crypto conference in a t-shirt and jeans. I think we, as a team at Snickerdoodle, do this very well.
Padilla: I will end by saying that I’m deeply appreciative of all the questions from the vVv community. As we get more products built out, we are super keen to have vVv as early adopters and users and to get your feedback on the product, data, wallet, and a lot of these applications. I look forward to working closely with vVv over the coming months.