This post is in response to Vlad Zamfir’s recent posts on blockchain governance which describe what he believes are likely outcomes and which of those outcomes he intends to support. If you haven’t already read them I suggest starting there first. In this post I will explain why I advocate for autonomous blockchain goverance.

After reading Vlad’s most recent posts on blockchain governance it felt necessary to express my opinion that the most important factor in blockchain governance is autonomy. Unlike Vlad I do not believe that the vision of autonomous blockchain governance implies maximal immutability. In my opinion, autonomous blockchains do not need to be immutable, they do not even need to remain neutral to moral or ethical concerns. They just need to be sufficiently decentralized as to prevent tampering or disabling of their operation by external forces.


In their new paper Vitalik Buterin, Zoe Hitzig, and E. Glen Weyl propose a mechanism for a more efficient allocation of resources towards public goods. The mechanism, called Liberal Radical (LR), seeks to create “formal rules for a society neutral among communities”. Which essentially means a way for a society to deploy collective resources towards public goods while remaining neutral with regard to its constituents often competing preferences.

The mechanism builds on a similar mathematical foundation as that of Quadratic Voting, however, rather than voting constituents direct personal contributions towards public goods and the LR mechanism is used to amplify those contributions. The funds contributed in this way result in the public good recieving an amount proportional to the square of the sum of the square roots of contributions directed towards the public good. As a result of this process, the impact of many small contributions are magnified through a subsidy funded by a deficit/tax model or philanthropic entity. The paper concludes that based on some assumptions about the behavior of economic agents the mechanism should result in a more efficient allocation of resources towards public goods than one would expect from either pure market capitalism or through a democratic governance process. …


A novel approach to creating a self-sustainable digital commons

This is a refinement of my proposal for a new open source license intended to provide a practical alternative to strict copyleft or permissive style open source licensing. This post discusses how such a license could use a self-assessed tax as a means to self-regulate and grow a digital commons. This idea was inspired by Posner and Weyl’s excellent book Radical Markets, and helps to simplify how the license would work and resolve some legitimate concerns about uncertainty risks in the initial proposal.

Permissive and Copyleft Licenses

The critical difference between permissive and copyleft style licenses is their approach to growing the value of the their respective commons. Advocates of permissive licensing argue that by making the software more accessible to commercial applications you attract wider adoption and through wider adoption attract more resources, attention, and ultimately more voluntary code contributions. In contrast, advocates of copyleft style licenses argue that without strictly enforcing that derivative works also remain open source, only a subset of application functionality remains open, and this subset tends to be commercial infrastructure rather than complete end-user applications. As a result, copyleft advocates believe that the creation of proprietary derivative works actively devalues the work’s original public source.


How the Ethereum community could begin making meaningful signaling-based decisions

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People often either over- or underestimate the power of signaling and social pressures influencing group decisions. A good example of overestimating the power of signaling is the notion that Vitalik is a benevolent dictator due to his influence in the community. Or that Ethereum’s governance boils down to a cartel of developers, despite neither party being able to make any direct changes to the Ethereum blockchain. On the flip-side token holders tend to underestimate their signaling clout. …


Exploring how the valuation models fail to account for protocol commoditization

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This post explores how the valuation models used to evaluate decentralized service protocols leveraging “work” tokens fail to account for protocol commoditization. When this effect is considered, protocol tokens appear to only be able to capture a small portion of the value that protocol creates for consumers because as token prices rise, these protocols become inherently less efficient. This relationship between token price and protocol utility shows a fundamental misalignment between the interests of investors and consumers. …


Launch of a new edition of the Aragon Network whitepaper and our research forum

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The initial version of the Aragon Network whitepaper was published over a year ago. Since then we have made tremendous progress in making Decentralized Autonomous Organizations a reality.

The work we have done on Aragon Core and the related development tools will make it possible for anyone to easily create a blockchain-native organization. With the tools we provide they can be a part of catalyzing this Cambrian explosion of different approaches to organizational structures and governance solutions. These new types of organizations will require a new type of jurisdiction for them to operate on. …


The intention of this post is to explore a possible way to make the Ethereum ecosystem more friendly without requiring any contentious changes to the base-layer protocol or community philosophy.

Personally, I’m against institutionalizing processes for irregular state changes to Ethereum, as I believe such a process undermines the core value proposition of a base-layer blockchain protocol.

However, it is clear that there is an issue that needs to be addressed to ensure that Ethereum lives up to its potential as a platform that is friendly to both developers who are creating valuable applications and to the users of those applications. …


Where research meets development

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Participants committed to leveraging decentralized governance

Co-Author of this post — Tatu Kärki

Ever since the early days of the Aragon project we’ve known that there will be obstacles that we’ll need to solve. Concepts that exist, but require research before we can begin implementing these ideas. But there’s no single solution in governance that works for each and every one. What might work well for a global aid organization likely doesn’t fit the needs of a neighbourhood lending ecosystem.

We want to make the creation and maintenance of organizational structures as easy and secure as possible. We’re not quite there yet, and we have to take things one step at a time. The project started with an app designed to make company structures more efficient. As the project matured from those first stages, we knew that a lot of research would be needed to achieve a more general platform. A platform that would be able to serve a much broader audience than corporation type organizational structure. …


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This post discusses governance and its impact on network effects and why both relate to how value flows and is captured within tokenized blockchain networks.

Hardware, Software, and Data are commoditized by decentralization

The process of commoditization turns a good or service which is highly differentiated or even unique into a fungible resource, where differences between the commodity offered by sellers in a market are low. Commoditized markets are associated with declining prices and narrow profit margins, as competitors struggle to differentiate their offerings and instead rely on price-based competition.

  • Hardware: Ethereum lets you pay for computation and storage on an as-needed basis by paying gas. Projects like Golem, Storj, Truebit, and others aim to further commoditize hardware through decentralized networks. …


I haven’t posted recently, but I’ve been very busy on a number of different fronts. A handful of people have asked me what I’m up to, and I’d like to give everyone a brief update on the various project I’m involved in.

Aragon

I’m extremely pleased to have been welcomed into the Aragon core team. After becoming an engaged and outspoken community member, its been a great experience transitioning into a full-time role working on driving adotion of decentralized organizational structures.

I’ll be focused on building specific token-based governance mechanisms on-top of AragonOS.

I’m extremely excited about this because these mechanisms will not only help us to experiment with how to effectively and safely transition authority of the Aragon project over to ANT holders, it will also enable additional functionality for AragonOS. These mechanisms will be modular building blocks (a.k.a. applications) that can be combined to create novel organizational structures and securely upgradable dApps. In fact, I plan to leverage these blocks in both Hive Commons and 1Hive! …

Luke Duncan

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