I understand the proofgrade plywood / acrylic. What I have a hard time imagining is the proof grade hardwoods. Is it just stock that’s inspected for defects / prepped to 1/2 or 1/4 thick and stickered?
I don’t imagine they are custom growing trees for proof grade walnut 
I think you answered your own question here. 
I think it’s just as simple (or complicated) as finding suppliers that can offer a consistent level of quality and thickness. And then adding stickers, of course.
There will always be natural aesthetic variations, but if they can source them sustainably, laser cut consistently and have them machined at precise thicknesses, the value of Proof Grade will definitely be there.
I don’t know if sustainability has anything to do with lasering (it does not) or just feel good feelings. I also don’t know if sustainable was promised.
So with proofgrade you get a product that is being sourced from a manufactured that is consistent and if it uses additives like say glue its laser safe. That have also calibrated those products for power speed and kerf as auto calibration never cam to fruition so they instead went with know element
We’ve got high aspirations for our Proofgrade materials - we want to do anything we can to make it a transcendently wonderful experience to work with, while still keeping the price competitive with what you’d buy locally. For the hardwoods, one thing you may have noticed if you made it to Maker Faire or Re:Make this weekend is that the material is presanded and finished. That’s a huge part of the time and effort of woodworking. Of course, the finish is tested to be laser compatible as well. We’ll keep exploring ways to improve the materials on an ongoing basis.
Yes, I noticed GF has trademarked the term "‘Proofgrade’.
Ah, this raises more questions 
I dabble in woodworking so now I’m wondering,
What type of finish, oil, polyurethane, lacquer, something else? (I imagine shellac is out because it doesn’t handle heat well)
What grit are they sanded to, 120, 220, 400?
What qualifies as a defect? knots of a certain size, sap wood that’s lighter colored (especially in walnut), voids?
Will it only be available prefinished? Or is this a special for the shows/maker fairs.
Edit:
Does pre-finish/sanding really save time? I’d imagine that you’d need to resand all of your cut edges and finish the sides of the parts/pieces as well. most finishes are surface and only penetrate a bit into the wood. I’d want to be able to match the new finish to the uncut surfaces.
I was wondering the same. Presanded is delightful, and prefinish would be nice for some things, but for a lot of others prefinish would just mean I have to sand down and refinish…
I would think to fully exploit the potential, they would offer like 3 stain levels - light medium and dark, as well as unfinished.
@dan - will you be qualifying some or all of the ProofGrade materials by batch as they come in to you or just once when a material is 1st qualified and then rely on your suppliers to maintain that quality and/or characteristics?
Me too. 
Nothing to share about the finishing process right now - but we do plan to sell the material pre-finished (and in larger pieces!).
Operational details like this will likely stay confidential; it’ll be our responsibility to ensure that quality stays consistent and high, regardless of how the material gets to you.
It sounds as if you’ve planned for the possibility of changing ProofGrade properties, which is comforting.
If I were to guess, I’d say that they will probably have contracts in place with suppliers requiring that materials meet certain specifications, with the occasional testing of different batches to make sure that the producers stick to what they promised.
But I’m sure the invisible Proofgrade barcodes will be able to be adjusted as needed to account for different characteristics of material in case manufacturers need to make changes or when Glowforge switches suppliers.
The trick will be specifications that map closely enough to laserability. So that a manufacturer can’t (even acting entirely in good faith) do something “smart” to their process that yields material meeting specs but zapping entirely differently.
Maybe the manufacturer will have a Glowforge and a test pattern, and the material will have to burn the pattern reproducibly.