Technology

The sharing economy ends up sharing a ton of laborearnings with middlemen like Uber and Airbnb, and$38 million-funded Origin wants the next great two-sided marketplace to be decentralized on the blockchain so drivers and riders or hosts and guests can connect directly and avoid paying steep fees that can range up to 20 percent or higher. So today Origin launches its decentralized marketplace protocol on the ethereum mainnet that replaces a central business that connects users and vendors with a smart contract.

&Marketplaces don&t redistribute the profits they make to members. They accrue to founders and venture capitalists,& said Origin co-founder Matt Liu, who was the third product manager at YouTube. &Building these decentralized marketplaces, we want to make them peer-to-peer, not peer-to-corporate-monopoly-to-peer.& When people transact through Origin, it plans to issue them tokens that will let them participate in the governance of the protocol, and could incentivize them to get on these marketplaces early as well as convince others to use them.

Originin-house marketplace DApp

Todaymainnet beta sees Origin offering its own basic decentralized app that operates like a Craigslist on the blockchain. Users can create a profile, connect their ethereum wallet through services like MetaMask, browse product and service listings, message each other to arrange transactions through smart contracts with no extra fees, leave reviews and appeal disputes to Originin-house arbitrators.

Eventually, with the Origin protocol, developers will be able to quickly build their own sub-marketplaces for specific services like dog walking, house cleaning, ridesharing and more. These developers can opt to charge fees, though Origin hopes the cost-savings from its blockchain platform will let them undercut non-blockchain services. And vendors can offer a commission to any marketplace that gets their listing matched/sold.

It might be years before the necessary infrastructure like login systems and simple wallets make it easy for developers and mainstream users to build and adopt DApps built on Origin. But it has plenty of runway thanks to $3 million in seed token sale funding from Pantera Capital, $6.6 million raised through a Coinlist token sale, plus $26.4 million in traditional venture funding from Pantera Capital, Foundation Capital, Garry Tan, Alexis Ohanian, Gil Penchina, Kamal Ravikant, Steve Jang and Randall Kaplan.

&Marketplaces are at the core of what makes the internet so valuable and useful and the Origin team has one of the most promising blockchain platforms for the new sharing economy — with currency baked in — this could be really disruptive (and one of the bestutilizationsof theethereumblockchain),& says Ohanian, the Reddit and Initialized Capital co-founder.

Liu and co-founder Josh Fraser came up with the idea after trying to imagine the downstream effects of ethereum. Liu recalls thinking, &What if we could replace dozens of multi-million and multi-billion-dollar companies with open-source protocols that aren&t owned or controlled by anyone&

Origin co-founders (from left): Matthew Liu and Josh Fraser

So why would marketplaces want to build on Origin instead of creating their own blockchain or traditional proprietary system Fraser tells me smart contracts can save money, but that &these individual pieces are incredibly difficult to build,& so he sees Origin as&analogous to Stripe — able to abstract away all the friction of building on the blockchain.& Indeed, 40 marketplaces have already signed letters of intent to build on the protocol.

If Origin reaches critical mass, it could also benefit from the concept of shared network effect. Users only have to sign up once, and can then interact with any marketplace built on Origin. That means new marketplaces that builds on the protocol instantly has a registered user base.

Origin will face some stiff challenges, though. There&ll be a chicken-and-egg problem of getting the first marketplaces signed up before there are users on its self-sovereign identity platform, or getting those users aboard when therelittle for them to do. Liu admits that timing is the startupbiggest threat. &We believe that decentralized marketplaces are inevitable, but a lot ofsmart peopleseem to think we&re too early and that we should be focused on building lower-level infrastructure instead,& the co-founder says. For us, we&d rather be too early than too late.&

Therealso the trouble of leaving actors in a capitalist system to treat each other properly without a centralized authority. If an Uber driver treats you terribly, you can complain and get them kicked off the platform. Even with Originreview system, abusers of the system may be able to continue operating. Iteasy to imagine its arbitration service becoming completely overwhelmed with disputes. Luckily, Origin has made some strong hires to tackle these challenges, including Yu Pan, who it says was a PayPal co-founder, former head of DropboxNYC engineering team Cuong Du, and FranckChastagnolwho previously led engineering teams at PayPal, YouTube, Google and Dropbox.

Originsuccess will all come down to usability. Your average Uber driver or Airbnb host is no blockchain expert. They vend through those apps because iteasy. Those centralized organizations are also highly incentivized to fulfill transactions quickly and smoothly in ways prohibited by eliminating fees. Origin will have to effectively make the blockchain aspects of its service disappear so all users and vendors know is that they&re paying less or earning more.

Square CFO Sarah Friar is stepping down to become the CEO of Nextdoor, according to the payment companyCEO, Jack Dorsey.

In a statement issued a bit ago, he says of Friar that she &steered us through an IPO and helped build a growing ecosystem of businesses that will scale into the future.& Friar &leaves us having established a culture of entrepreneurship and discipline across the entire company. She has been an amazing leader, partner, and friend, and we are grateful for all shedone for Square.&

Nextdoor has since released its own statement about Friar, who will assume the position in December. Quoting the companyco-founder and outgoing CEO Nirav Tolia, the statement reads: &Sarah is one of the most highly regarded executives in Silicon Valley with an exceptionally rare mix of proven business skills, and authentic heart and soul. . . From the very beginning of our CEO search, she has been the top choice, and the board of directors and I feel exceptionally fortunate and excited for her to lead Nextdoor moving forward.&

The hire looks like a smart move by Nextdoor, the fast-growing social network that centers around neighborhoods and which, three months ago, announced that Tolia planned to step aside as soon as he found the right person to take Nextdoor &to the next level.&

At the time, Tolia had said in an email to employees that the role of CEO needed to evolve as the company evolves. He also said then that he will remain the companyboard chairman.

San Francisco-based Nextdoor has raised $285 million from investors over its eight-plus years, including from Insight Venture Partners, Benchmark, Shasta Ventures, Tiger Global Management and Kleiner Perkins. The company has soared into unicorn terrain, but it also seemingly needs to generate more revenue before it can be taken public. Toward that end, it began offering paid real estate listings roughly one year ago. The company also sells targeted ads.

Friar, often described as Dorseyright-hand woman at Square, grew up in Northern Ireland, the daughter of farmers. She was the first in her family to go to university, studying engineering at Oxford.

After graduating, she joined McKinsey as a business analyst in London, then Johannesburg, before moving to California in 1998 to nab an MBA at Stanford. Friar went on to spend a decade with Goldman Sachs in Silicon Valley, leaving the powerhouse bank as a managing director before spending a year with Salesforce as an SVP, then joining Square in 2012.

In addition to her work with Square, Friar sits on the boards of two powerful companies: Slack and Walmart.

Shares of Square have falleninafter-hours trading on the news.

Microsoft announced today that itjoined open-source patent group Open Invention Network in an effort to help shield Linux and other open-source software from patent-related suits. As part of the deal, the software giant is opening a library of 60,000 patents to OIN members. Access to the massive portfolio is unlimited and royalty free.

It is, as ZDNET notes, a shift away from the aggressively litigious corporation of yearpast. Among other suits, the company had previously gone after a number of different companies in the Android ecosystem. Microsoft acknowledges as much in its announcement, adding that the news should be taken as a sign that itturning over a new leaf.

&We know Microsoftdecision to join OIN may be viewed as surprising to some,& EVP Erich Andersen writes in a blog post, &it is no secret that there has been friction in the past between Microsoft and the open source community over the issue of patents. For others who have followed our evolution, we hope this announcement will be viewed as the next logical step for a company that is listening to customers and developers and is firmly committed to Linux and other open source programs.&

The news also finds the company looking to blur the lines between Windows and Linux development, encouraging devs to create programs for both operating systems, along with .NET and Java.

Last week, Microsoft followed the lead of companies like Google, Facebook and Amazon by joining anti-patent trolling group the LOT Network.