On Power and Partisanship Within Terra Classic

Twitter: @4lex_4sh4w_TR

Almost all L1 blockchains follow a highly centralized model, where a handful of VCs organizes around a talented team of blockchain engineers with a novel consensus mechanism. The engineers typically adopt a highly centralized legal entity, with some decentralized governance formalities (eg, a nonprofit foundation to represent the commons), declare themselves decentralized, and otherwise function pretty much like any other well-funded startup. They’re still dependent upon a CEO-figure for their paychecks (who is in turn dependent upon broad investor support). The decentralization they sell to future investors always starts out as BS or extremely aspirational, and almost always stays that way.

The “community” is usually pretty fleeting, motivated by generous airdrop schedules, meme hype, or other unsustainable drivers.

Terra Classic doesn’t have that problem. It has a very decentralized, hyper-engaged community — despite a complete lack of airdrops or functioning ecosystem! This has created a new set of governance challenges which has occurred in some of the the most successful DeFi DAOs over the years (Curve and Maker come to mind), but is extremely rare for an L1.

Problem: We need to build a decentralized infrastructure for maintaining the blockchain that respects the natural divisions of the Terra Classic community, and is adaptable to very rapid changes in external circumstances, leadership personalities, and group identities.

Such a system would have to delegate significant financial responsibility to community-approved specialist groups. It is not sustainable or scalable for the community to vote on every single expense line item, even with an extremely cooperative and dev-aligned ecosystem (which has not been the case with Terra Classic thus far, although that’s changing quickly).

Ideally this infrastructure would be able to flexibly and transparently address the following questions:

1. What group(s) is/are responsible for carrying out necessary core functions?
2. How much money should be allocated to execute each core function?
3. How can that money be tracked in a way that’s credible, including to parts of the community that really don’t get along with the group trusted to carry out a specific function?
4. How can devs be compensated in a way that’s somewhat organized but also reflects true divisions within the community, and can adapt to changes in community trust or external circumstances?

Besides solving these “proof of accountability” problems, the system would also have to address several problems that crypto has, so far, miserably failed to solve.

1. Political disagreements between different parties turn into Twitter shouting matches, forcing devs to consume huge amounts of time defending themselves on Twitter instead of working
2. Proof of megaphone != proof of work
3. Decentralization of power ?= destruction of accountability
4. Validator political disengagement: Validators, in theory, are the natural “parliament” or “senate” of a blockchain. However, in practice, most significant validators are apolitical network maintenance specialists who maintain operations on multiple chains and don’t have the time, energy, or incentive to beef in every Game of Thrones political situation on every chain.

Terra Classic’s political parties

If I had to call out specific parties on TC, I could name a few —

• A massive ‘LUNC retail party,’ formerly one bloc under LUNCDAO and Vegas’s ‘Luna Classic Community,’ now fragmenting into multiple factions around specific influencers, with breakaways generally taking much more pro-growth, pro-development, anti-corruption stances relative to the prior, LCC/Terra Rebels status quo. Core competencies: Marketing, communications, multiple other (depends on subgroup)
• A ‘Terra Rebels party,’ centered around Zaradar, historically distinct from but increasingly captured by Vegas’s ‘Luna Classic Community’ as the LCC-retail bloc has broken up. Core competencies: Development, operations, security (distinct from the LCC)
• An ‘independent centrist party’ around Ed Kim and other TR OG’s, prioritizing good governance, transparency, decentralization, and stability. Core competencies: Protocol management, security, operations, auditing, governance, front-end development, personnel management
• Independents: individuals like Jacob Gadikian, StrathCole, and others who have had massive proof-of-work contributions to the chain or the community, while somehow managing to stay apolitical. Core competencies: development, many other
• A growth- and AFT-focused party that I’m part of, focused on AFT design, ecosystem growth / optimizing the economic environment for dApp devs, anti-corruption, and decentralization. Core competencies: DeFi, product development, legal/regulatory, financial stability, “biz strategy”

All of these tribes want the best for the chain, but all have different skillsets, key priorities, and so on. Ideally, over time, all of these “parties” will build their own dapp power bases on the chain and contribute their own separate proofs of work to help optimize specific parts and product features of our blockchain. And ideally, this system will be open to constant, rapid change.

Humans have naturally organized around trusted personalities, common goals, and key issues since forever. We shouldn’t make the mistake of other L1’s, who adopt a de-facto CEO and highly centralized chain of command with fig leaves of decentralization. Instead, we should embrace the reality that we’re different, we will never all trust one another’s motives or intentions, and we should embrace that reality rather than ignore it.

An Israeli governance model for Terra Classic?

Israel is a great example of a consensus mechanism adapting to a hyper-volatile climate. Its elections are extremely frequent, featuring 10+ political parties, each full of colorful personalities, massive egos, and endless knife-fighting. Every election, after the individual parties win their votes, each party negotiates its place in the coalition that maximizes its own power but also matches the party with its signature issue or issues. The leader of the security-hawk party might run the Defense Ministry, the leader of a libertarian-centrist party might run the Finance Ministry, etc.

We are always going to be a very unruly group of tribes and we need to figure out a way to govern the chain that’s a) genuinely decentralized, b) assigns responsibilities to blocs of specialists with the skillsets to take on those responsibilities instead of collectivizing them, c) makes it so that the protocol doesn’t have to collectively vote on every single managerial micro-decision or micro-transaction, and d) has a more efficient conflict-resolution mechanism than endless, 24/7/365 Twitter warfare.

Going with a party-based approach offers other advantages. Instead of betting on one individual making a set of promises, the protocol could bet on a pre-existing organization of people with similar priorities, proof of organization, and prior proof of work. The decision would be much more informed than, say, voting for 20 random individuals with their own different political brands which appeal to narrow subsets of the Terra Classic community.

I feel like Terra Classic needs some kind of multiparty-based system to assign core functions to different political blocs of specialists if it wants to effectively scale its governance, weighted by each faction’s skillset and political power, which also accepts the inevitability of many vocal opinions, big egos, and variances of trust across the community.